GKN and Huaya Automotive Systems (HASCO) have announced a major expansion of their Chinese joint venture – Shanghai GKN Driveshafts (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,” the partners said in a statement.

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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 GKN 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.

GKN Automotive chief executive Andrew Reynolds Smith  said: “China is the world’s largest car market and, together with our partner HASCO, GKN Driveline 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. This is a very important step as we continue to grow by leveraging GKN Driveline’s leading technology and global footprint.”

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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 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.