Shanghai-based reporter Wei Jinqiao reports that Wanxiang Group, a leading Chinese automotive parts manufacturer, is in advanced talks to acquire certain assets from Delphi Corporation, the world’s second-largest auto parts supplier. The focus of the potential acquisition is on Delphi’s mechanical steering systems, which align with Wanxiang’s core business.
Wan Guanqiu, chairman of Wanxiang Group, confirmed to U.S. media that the company is actively negotiating with Delphi for selected assets in the U.S. A Delphi representative mentioned that Wanxiang has shown strong interest in acquiring some of Delphi’s assets, particularly those related to mechanical steering systems that overlap with its own operations. However, no final agreement has been reached yet.
As Delphi North America faces financial difficulties, the company has officially launched its restructuring plan. Several major auto parts companies, including Johnson Controls, are now exploring opportunities to participate in Delphi’s reorganization. According to an insider at Delphi China, the restructuring plan covers nearly all of Delphi’s core businesses, including both electronic control systems and mechanical powertrain components.
Wanxiang Group has not publicly commented on the potential acquisition. When contacted, the company’s headquarters and general manager office declined to provide details. A spokesperson for Delphi China stated, “We have no comment on Wanxiang Group’s acquisition intentions.â€
Wanxiang’s main products include chassis components such as mechanical steering systems and drive shafts. According to Ni, a senior executive, the group is interested in acquiring assets from top-tier or second-tier U.S. auto parts suppliers that complement its existing business. In addition to Delphi, Wanxiang is also in discussions with other U.S. companies for asset acquisitions, some of which are close to completion. However, specific names of the companies involved remain undisclosed.
Analysts suggest that the mechanical systems Wanxiang is targeting are among Delphi’s most profitable and strategically important assets, making it unlikely that Delphi will sell them easily. Other potential acquisitions may carry higher risks.
In recent years, Wanxiang has taken a more cautious approach to acquisitions. Last year, it attempted to acquire Chinese firms like Xiangyang Bearing and Hunan Torch but eventually withdrew from the deals.
With Delphi accelerating its integration in the North American market, some of its assets have started being sold off. Although Delphi officials claim that the bankruptcy filing in the U.S. does not affect its Chinese operations, internal sources suggest otherwise. For instance, Delphi recently sold its battery business in China to Johnson Controls.
Delphi currently invests over $500 million in China, operating 14 joint ventures and wholly owned subsidiaries, along with a training center and R&D facility. It supplies almost all major vehicle manufacturers in the country. Since entering the Chinese market in 1993, Delphi’s sales have grown significantly—from $20 million to $650 million by 2003.
However, this year, Delphi China has seen slower growth due to increased competition from German giants like Bosch and Denso, as well as Visteon. While Delphi had previously promised to expand its Shanghai R&D center, it has not announced any major new investments this year. Meanwhile, competitors have poured hundreds of millions into expanding their presence in China.
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