US auto parts maker launches joint venture in China despite trade tensions

CHICAGO - American Axle & Manufacturing (AAM), a leading auto parts manufacturer, has announced to launch a joint venture in southern China to make driveline systems despite protectionist rhetoric out of Washington.

AAM confirmed that it entered into a joint venture agreement earlier this week with China's Liuzhou Wuling Automobile Industry Co. Ltd. to set up Liuzhou AAM Automotive Driveline System Co. Ltd., which will begin production later this year in a state-of-the-art manufacturing facility located in an economic development zone of Liuzhou City, Guangxi Province.

"Liuzhou AAM will be our latest manufacturing facility in China that further expands and diversifies our global footprint," David C. Dauch, AAM Chairman and Chief Executive Officer, said in a statement released on Thursday.

"AAM is committed to strategically growing with new customers in new markets," he said, adding that Liuzhou AAM will continue to enhance their ability to provide both conventional and electric drive axles in the world's largest automotive market.

According to AAM's Chinese partner, the joint venture is expected to achieve a yearly revenue of 300 million Chinese Yuan (about 48 million U.S. dollars) by 2020.

The rear axles and driveheads the joint venture will manufacture are to meet the needs of the fast-growing segments of multi-purpose vehicles and crossovers including vans, mini vans and sport utility vehicles in fast-growing Chinese automotive market.

The partnership came as U.S. automakers and related suppliers urged Washington to resolve trade disputes with China through negotiations, not punitive tariffs.

General Motors Co. underlined in a statement "the interdependence between the world's two largest automotive markets," adding they believe "both countries value a vibrant auto industry."