Double happiness for GKN in China

  • 11-Dec-2008 12:37 EST
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GKN, with its Chinese joint-venture partner SAIC, now has five plants producing driveline parts.

GKN, a global supplier of automotive driveline components, recently celebrated the 20th anniversary of its GKN Drive Shaft Co. (SDS) in Shanghai, China. It was the first ever joint venture in China by a major Western automotive supplier, according to GKN, and currently is China’s leading supplier of driveline components, with a number of important Chinese partners.

"GKN Shanghai SDS serves as an industry model for successful joint-venture operations in China, and we anticipate continued growth for years to come,” said GKN Automotive Chief Executive Officer Nigel Stein at the recent anniversary ceremony in Shanghai. “Over the last five years, Shanghai GKN has invested more than $100 million [about 1 billion renminbi] to expand production in China, including major investments for new manufacturing facilities in Wuhan and Chongqing.”

Shanghai GKN SDS annually produces more than 600,000 propshafts, 5 million sideshafts, and 1.5 million constant-velocity joints.

SDS’s founding Chinese automotive partner, SAIC (35% shareholding vs. 50% for GKN, with the remainder held by other investors), is one of the biggest customers. SAIC uses the driveline components in vehicles made by its Shanghai-Volkswagen and Shanghai-GM joint ventures. Other major SDS customers include leading French, German, U.S., and Japanese groups, along with domestic brands FAW and Chery.

Stein said GKN’s new 144,000-ft2 (13,400-m2) plant in Wuhan is on schedule to begin production early in 2009. It is expected to provide more than 600 jobs, with an annual capacity of more than 1 million driveshafts.

Less than a week before the 20th anniversary, GKN had announced commencement of production at its wholly owned GKN Driveline Torque Technology facility in Pudong, Shanghai. Initial products include transmission differentials for major Chinese and overseas manufacturers. The company is also developing three new power transmission units that will enable certain Chinese and Asian automakers to sell what had been front-wheel-drive models as all-wheel-drive models beginning in 2009.

“This is an important milestone for our expanding presence in China,” said Graeme Walford, Managing Director, GKN Driveline Torque Technology. “From our new strategically located base, we now can offer a wider range of our torque products to the Chinese car industry, as well as for export.”

GKN in China employs 3500 people and generated sales of about $330 million (about 2.5 billion renminbi) in 2007.

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