Shanghai-based reporter Wei Jinqiao reports that Wanxiang Group, a leading Chinese auto parts manufacturer, is in talks to acquire certain assets from Delphi Corp., the world’s second-largest automotive supplier. The focus of the potential deal is on Delphi’s mechanical steering systems, which overlap with Wanxiang’s core business.
Wan Guanqiu, chairman of Wanxiang Group's board, confirmed to U.S. media that the company is currently negotiating with Delphi over the acquisition of specific assets in the U.S. According to a U.S. representative, Wanxiang has shown strong interest in acquiring parts of Delphi’s portfolio, particularly its mechanical steering systems. However, no final agreement has been reached yet, and the outcome remains uncertain.
As Delphi North America faces financial difficulties, the company has officially launched its reorganization plan. Several major auto parts companies, including Johnson Controls, are now seeking involvement in the restructuring process. A detailed plan for Delphi’s reorganization is reportedly circulating internally, and it is said to cover nearly all of the company’s core operations, including both electronic and mechanical systems.
A source from Delphi China told the "First Financial Daily" that the restructuring involves key areas such as powertrain and control systems. When contacted, Wanxiang Group headquarters declined to comment on the acquisition discussions, while Jiang Jian, vice president of Delphi China, stated that the company had no official response regarding the potential deal.
Wanxiang Group primarily produces chassis components like mechanical steering systems and drive shafts. According to Ni, who spoke to U.S. media, the company is interested in acquiring assets from top-tier or second-tier U.S. auto parts suppliers that align with its business strategy. In addition to Delphi, Wanxiang is reportedly in advanced negotiations with other U.S. firms, though specific names have not been disclosed.
Analysts suggest that some of the mechanical system assets Wanxiang is targeting are among the most profitable parts of Delphi’s North American operations, making them highly valuable. However, experts caution that acquiring other parts may carry significant risks.
Wanxiang has been cautious in its recent acquisitions. Last year, it attempted to acquire companies like Xiangyang Bearing and Hunan Torch in China but eventually withdrew. Meanwhile, due to the ongoing challenges in Delphi’s North American market, some of its assets have started being sold off. Although Delphi has denied any connection between its bankruptcy filing and its Chinese operations, internal sources suggest otherwise.
In fact, Delphi’s battery business in China was recently sold to Johnson Controls. A Delphi employee noted that while the company hasn’t reduced its investment in China, the instability in North America has already begun affecting the mindset of employees, many of whom are now seeking new opportunities.
Delphi has invested over $500 million in China and operates 14 joint ventures and sole proprietorships, along with a training center and R&D facility. It supplies nearly all major automakers 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, under pressure from competitors like Bosch, Denso, and Visteon, Delphi China’s growth has slowed. While it previously promised to expand its Shanghai R&D center, there have been no major new investments this year. In contrast, Bosch and Denso have each invested hundreds of millions of dollars in China, further intensifying competition.
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