Top Biz News

Delphi to build new half-shaft plant

By Yu Qiao (China Daily)
Updated: 2006-12-22 14:02

Struggling US auto parts maker Delphi Corp, whose non-core businesses have become merger targets for some Chinese firms, said it will build a new half-shaft plant in China with a local partner.

Delphi will control a 60 per cent stake in the US$40 million factory in Wuhu, East China's Anhui Province, it said in a statement. Lingyun Industrial Group, from Hebei Province, will hold the remaining 40 per cent.

The plant, the second half-shaft partnership between Delphi and Lingyun, will begin full operation in 2008, doubling the half-shaft production capacity of the US group's steering unit in China, Delphi said.

Delphi, which provides more than 40 kinds of auto parts in China, now has 11 manufacturing sites in the world's second-biggest vehicle market. The firm, which also has a technical centre in Shanghai, has invested more than US$500 million in China.

A former subsidiary of US carmaker General Motors, Delphi announced earlier this year that it aimed to sell or close non-core product lines by the end of next year to slash costs. These product lines could include brake and chassis systems, steering and wheel bearings, door modules and latches, and cockpits and instrument panels.

A slew of Chinese companies, such as the nation's top diesel engine maker Weichai Power Co and biggest auto parts producer Wanxiang Group, recently said they intend to buy some Delphi assets in the United States.

However, none of them have revealed what kind of Delphi assets they are interested in.

Jay Jiang, deputy general-manager of Delphi China Holding Co, yesterday declined to provide any details of talks between Delphi and these Chinese firms, saying: "Lots of companies in other parts of the world, such as India, are also interested."