GKN plc has announced a new automotive manufacturing facility and a new automotive joint venture in China.
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The two announcements were made at the Auto China 2006 international motor show and followed an earlier announcement of the acquisition of a leading Chinese manufacturer of wheels for the off-highway sector.
GKN Driveline Torque Technology is to establish a new manufacturing facility in Shanghai’s Kangqiao development zone, with an initial investment of RMB34m (£2.25m).
GKN Driveline Torque Technology managing director Graeme Walford said in a statement: “We are experiencing rapid growth in demand for our torque technology products in China.”
The company will initially manufacture a range of geared components at Kangqiao, including differentials, final drive units, power transfer units and advanced torque management devices as market demand increases. Initial production will start next year.
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By GlobalDataGKN Driveline has also exchanged contracts to form a new driveshaft manufacturing joint venture, GKN Driveshaft (Chongqing) (GDC) in Chongqing, central China, to supply driveshafts to China South Industries Motor Company (CSIMC), the country’s third largest vehicle maker.
GKN Driveline’s existing 50% joint venture, Shanghai GKN Drive Shaft Company (SDS), owns 51% of GDC and will consolidate its financial results. The remaining shareholders in GDC are CSIMC (40%) and GKN Driveline (9% directly). Together with its direct and indirect shareholding in SDS, GKN Driveline owns 34.5% of GDC.
GKN Driveline said that, by forming GDC, it would ensure it remains close to CSIMC’s key OEMs which include 50% owned ChangAn Ford and 51%-owned ChangAn Suzuki passenger car manufacturers as well as its 100% owned in-house brand, Chana.
GKN’s existing 50% 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 expected to employ about 155 people. The capital investment will be approximately EUR9m, funded locally.
Total investment in registered capital is RMB50m or EUR4.8m Euro, of which GKN Driveline’s direct 9% share is EUR0.4m. 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 off-highway 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.
