New Manufacturing Facility and New Joint Venture Continue GKN's China Growth |
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GKN Driveline, Inc.
3300 University Drive
Auburn Hills, MN, 48326-2362
USA
Press release date: January 17, 2007
BEIJING, January 17: GKN continued its expansion in China with the announcement of a new automotive manufacturing facility and a new automotive joint venture. The two announcements, which were made at Auto China, Beijing -- one of Asia's leading motor shows -- follow GKN's recent acquisition of a leading Chinese manufacturer of wheels for the off-highway sector.
New Manufacturing Facility
GKN Driveline Torque Technology will establish a new manufacturing facility in Shanghai's Kangqiao development zone, with an initial investment of RMB 34 million (2.25 million pounds Sterling). Graeme Walford, managing director of GKN Driveline Torque Technology, said: "We are experiencing rapid growth in demand for our torque technology products in China. This is in part due to the dramatic growth of the vehicle market here, but it is also a reflection of the technological leadership we are proud to be able to offer our customers." GKN Driveline Torque Technology will manufacture a range of geared components at Kangqiao, from differentials to final drive units, power transfer units and advanced torque management devices as market demand for these products matures. The new facility has been located conveniently for the company's major customers and suppliers. Initial production will start this year.
New Joint Venture
GKN Driveline also has exchanged contracts to form a new driveshaft manufacturing joint venture, GKN Driveshaft (Chongqing) Limited ("GDC") in Chongqing, central China to supply driveshafts to China South Industries Motor Company Limited (CSIMC) in China, the country's third largest OEM.
GKN Driveline's 50 percent joint venture, Shanghai GKN Drive Shaft Company Limited ("SDS") based in Shanghai, owns 51 percent of GDC and will consolidate its financial results. The remaining shareholders in GDC are CSIMC with 40 percent and GKN Driveline with nine percent directly. Together with its direct and indirect shareholding in SDS, GKN Driveline owns 34.5 percent of GDC.
By forming GDC, GKN Driveline will ensure it remains close to CSIMC's key OEMs which include its 50 percent owned ChangAn Ford and 51 percent ChangAn Suzuki passenger car manufacturers as well as its 100 percent owned in-house brand, Chana.
GKN Driveline's existing 50 percent owned driveshaft operations, based in Shanghai and Jilin, will remain independent of GDC and will supply components to GDC to maximise synergies across the three operations.
GDC is forecast to employ 155 people. The capital investment will be approximately 9m Euro, funded locally. Total investment in registered capital is RMB 50m or 4.8m Euro, of which GKN Driveline's direct nine percent share is 0.4m Euro. SDS and GKN Driveline will fund their investments through current cash resources.
GKN has operated in China for 18 years and currently employs some 2,800 people across its Driveline, Sinter Metals and OffHighway operations. Current plans envisage the Group's China workforce increasing to around 6,000 within four years. This would make China the third largest concentration of employment within the global GKN Group.
Editor's Notes:
GKN Driveline is a global enterprise with 21,000 people working at more than 40 locations in over 30 countries. The company recorded sales of 3 billion Euro in 2005. Recognised as the auto industry's leader in the design and production of driveline components, GKN Driveline provides driveline solutions from the smallest front-wheel-drive vehicles up to the most sophisticated four-wheel-drive models. The company has a commanding share of the global market for CVJ (constant velocity joint) sideshafts and also is a leading global producer of all-wheel-drive PTUs (power transfer units) and torque management devices.
GKN Driveline was the first automotive component company to establish a joint venture in China in 1988 -- Shanghai GKN Drive Shaft (SDS). In 1996, a second joint venture was formed with GKN Jilin Norinco Drive Shaft (JDS).
Further information is available on the Internet at http://www.gkndriveline.com. Web site: http://www.gkndriveline.com Source: GKN Driveline
Company Contact: Paul Dinwiddy, Communication Director, GKN Driveline Headquarters, +44-1527-533-646, mobile: +44-7801-077-523, paul.dinwiddy@gkndriveline.com; Media Contacts: The Americas: Don Haberek, dhaberek@usautocom.com, or Larry Weis, lweis@usautocom.com, AutoCom Associates, +1-248-647-8621; Europe: Simon Pearson, +44-207-861-3158, mobile: +44-7836-744-192, simon@s-pearson.com; Japan: Yoshinori Yamaguchi, Inoue Public Relations, +81-03-5269-2301, yamaguchi@inoue-pr.com; China: Clarissa Zhang, +8610-6522-8081, ext. 219, clarissa@eba.com.cn, or Albert Lian, +8610-6522-8081, ext. 232, albert@eba.com.cn, Euan Barty Associates
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