GKN and HUAYU Automotive Systems (HASCO) have announced a major expansion of their Chinese joint venture - Shanghai GKN Driveshaft (SDS). This development will make SDS a leading supplier of all-wheel drive (AWD) and electric-drive (eDrive) systems to these fast-growing segments of the Chinese car market.

SDS has been operating since 1988 and is the largest driveshaft manufacturer in China producing both sideshafts and propshafts, supplying domestic and western brands from eight manufacturing plants. The SDS expansion extends the scope of the JV to cover the complete driveline capability - including AWD and eDrive components and systems.

As a result of this development, GKN Driveline's wholly-owned facility in Shanghai will become part of the expanded JV.

Speaking in China, ahead of Auto Shanghai 2013, Andrew Reynolds Smith, chief executive GKN Automotive, said: "China is the world's largest car market and, together with our partner HASCO, GKN has built a fantastic market leading position for SDS over the last 25 years. Today's announcement provides the platform to accelerate our business in the fast growing Chinese SUV and all-wheel drive market."

Vehicle production in China is expected to continue to grow strongly. A key driver of this growth comes from the demand for SUVs and AWD vehicles which are outgrowing the market. GKN's efficient and lightweight driveline technology positions SDS well to address the vehicle performance, emissions and fuel economy demands of the future.

The transaction remains subject to Chinese government approval. As a consequence of the change, SDS will change its name to Shanghai GKN HUAYU Driveline Systems.