News Article

GKN Plans Further Automotive Expansion in China

April 2005
GKN plans to further expand its automotive presence in China this year with a new joint-venture to produce engine components in Henan province.

When fully operational, GKN Zhongyuan Cylinder Liners in Mengzhou City will manufacture more than three-million cylinder liners annually for trucks for both domestic use and export in the first stage. Production is scheduled to begin in 2006.

This latest move in China builds on more than 17 years of growth by GKN Driveline, the world's leading producer of driveline systems and components; GKN Driveline has been a pioneer in the development of China's growing automotive infrastructure. With almost two decades of manufacturing experience in China, GKN Group has six joint ventures in this country, among which four are subsidiaries of GKN Driveline. GKN Driveline currently employs nearly 3,000 people in four joint ventures throughout the country.

GKN Driveline commands a leading share of the Chinese automotive market for driveline products, supplying all of the country's major vehicle manufacturers. GKN Driveline has manufacturing operations in Shanghai, Jilin, Taiwan Hsin Chu and Kunshan.

"Over the past 17 years, GKN has established a clear reputation for technology leadership with its business partnerships in China," said Ian Griffiths, chief executive of GKN Automotive. "No other Tier One driveline supplier can match the depth and reach of our company's manufacturing expertise in this all important market."

"Our facilities give GKN Driveline the ability to supply China's domestic automotive market with the industry's widest range of Chinese-made advanced driveline components,," Ian Griffiths noted. "GKN supplies all of China's major vehicle manufacturers and has a leading share of China's market for automotive driveline products. Our new joint venture in Henan province clearly demonstrates our confidence in this important growth market."

GKN's Shanghai operations supply driveline components for more than 40 vehicle programmes, and SDS delivered more than 1.1million vehicle sets and 320,000 propshafts to its customers in 2004.

GKN's joint venture with the Shanghai Automotive Industry Corporation (SAIC), SDS's has application engineering and testing facilities in Shanghai which are supported by GKN Driveline's global network of research and product-development centres.

"SDS's fully equipped engineering centre in Shanghai has the ability to do all of the testing required to validate GKN Driveline products throughout China," said Ian Griffiths.

GKN Driveline's history in China dates back to 1988 with the formation of its first joint venture, Shanghai GKN Drive Shaft, for the manufacture of sideshafts and propshafts for domestic and export markets. Precision-forming production was added at Shanghai in 2002.

The company has been making driveline products at its Jilin joint venture with Norinco in northern China since 1996. Jilin GKN Norinco Drive Shaft (JDS) manufactures sideshafts.

Fujiwa Machinery Industry in Kunshan, north of Shanghai, is a joint venture with Lioho of Taiwan. This facility manufactures a variety of castings for final drive units, brake drums and fly wheels.

Through its operations in China, the GKN Group employs 2,600 people: 1,250 in Shanghai, 850 in Kunshan, 260 in Hsin Chu, 240 in Jilin, and by the end of the year, another 400 at Mengzhou City.

GKN Driveline will again exhibit at this year's automotive show (April 22-28) in Shanghai. GKN Driveline's display (Booth C 12 in Hall E2) includes a wide range of components, including sideshafts, propshafts and torque-management products.

About GKN plc
GKN plc is a global company focused on the automotive and aerospace sectors, operating in over 30 countries and employing more than 36,000 people. In the automotive sector, GKN is the world leader in driveline systems and components and globally number one in the production of constant velocity sideshafts. GKN is the world leader in powder-metal parts production and in the USA is number one in powder-metal manufacture. It is the world leader in the supply of power-take-off shafts and wheels designed specifically for off-highway applications and also is the world leader in metal substrates for catalytic converters, through its 50 percent ownership in Emitec.

About GKN Driveline
GKN Driveline is a premier partner of the automotive industry worldwide, producing driveline components for leading vehicle manufacturers from 49 locations in 31 countries. More than 21,000 GKN Driveline people focus their energy and imagination on finding new ways to provide added value for customers, drawing on the world's widest range of driveline components and technologies to engineer total systems that deliver improved performance for every vehicle configuration. The company's strength in the Chinese automotive market goes back to the 1980s, forging strong partnerships based on supply reliability, product integrity and quality consistency. Today, GKN shares its unique application capability with customers to develop dedicated driveline solutions that meet the challenge of improved environmental performance, greater efficiency, lighter weight and enhanced reliability.

GKN Driveline is the world leader in sales of torque-management devices and the number three independent manufacturer of high quality geared components. GKN Driveline has the widest portfolio of torque management devices from mechanical, speed sensing to electronically controlled differentials.

GKN in China

Shanghai GKN Drive Shaft (SDS) was established in 1988 as a joint venture with the Shanghai Automotive Industry Corporation (SAIC). It manufactures sideshafts and propshafts.

Jilin GKN Norinco Drive Shaft (JDS) founded in 1996 as a joint venture with JMM (a subsidiary of Norinco). It manufactures sideshafts.

Fujiwa Machinery Industry (FJW) in Kunshan was established in 1995 as a joint venture with Lioho Machine Works. It is the largest manufacturer of differential cases and full differentials in China. It manufactures a variety of castings for final drive units, brake drums and fly wheels.

Taiwan Hsin Chu is a joint venture in Taiwan, established in 1983 and manufactures sideshafts.

GKN Zhongyuan Cylinder Liners in Mengzhou was established earlier this year as a joint venture with Henana Zhongyuan Engine Fittings. It will manufacture three million truck-cylinder liners a year in the first stage with a bore diameter from 90 to 250 millimeters.

Company contact
Paul Dinwiddy - communication director
GKN Driveline Headquarters
Tel: +44 1527 533 646
email: paul.dinwiddy@gkndriveline.com

Media contact
Celia Wang/ Yan Xiao
Euan Barty Associates
Tel: +8621 6289 3488 ext 16/12
email: celia@eba.com.cn
yan@eba.com.cn

Dan Criscenti
AutoCom Associates
Tel: +1 248 647 8621
email: dcriscenti@usautocom.com