GKN Plans Further Automotive Expansion in China

SHANGHAI, China, April 21 -- 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.

The new joint venture builds on more than 17 years of growth in China 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.

GKN Group has six joint ventures in China, four of which are subsidiaries of GKN Driveline. GKN Driveline currently employs nearly 3,000 people in four joint ventures throughout the country.

With almost two decades of manufacturing experience in China and production facilities in Shanghai, Jilin, Taiwan Hsin Chu and Kunshan, GKN Driveline commands a leading share of the Chinese automotive market for driveline products, supplying all of the country's major vehicle manufacturers.

"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," 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 programs; and SDS, GKN's joint venture with Shanghai Automotive Industry Corporation, delivered more than 1.1 million vehicle sets and 320,000 propshafts to its customers in 2004.

SDS has application engineering and testing facilities in Shanghai that are supported by GKN Driveline's global network of research and product- development centers.

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

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.