A sudden global financial crisis brought forth great opportunity for Chinese automakers and suppliers conducting overseas acquisitions for core technologies.
A successful overseas acquisition is a shortcut for Chinese companies to upgrade their products and enter overseas markets.
Geely Holding, for example, can transfer technology from its wholly-owned subsidiary Volvo Car Corp. in order to build Volvo cars in China. Volvo agrees to transfer the XC90 platform to parent Geely. Volvo was acquired by Geely.
“It is the first time that a multinational automaker transfers advanced technology to a Chinese independent brand,” Huang Yonghe, director of Automotive Industry Policy Research under the China Automotive Technology & Research Center, was quoted as saying by a local newspaper.
Two years after taking over the Australia Drivetrain Systems International (DSI), Geely invested ¥500 million on a manufacturing plant in Hunan in 2011 to produce 6-speed manual and high-end automatic transmissions.
Beijing Automotive Industry Holding Corp. (BAIC) acquired in 2009 three Saab vehicle platforms, two series of turbocharged engines and transmissions as well as manufacturing molds for $197 million. With the technologies, BAIC is working on developing 3-4 all-new sedans and 2-3 turbocharged engines.
BYD in 2010 bought a die factory under Japan’s Ogihara Corp. Some production lines have been moved to China. With the acquisition, according BYD chairman Wang Chuanfu, BYD has successfully mastered the core technology in automobile die manufacturing.
In addition to efforts by Chinese OEMs in overseas acquisitions, Chinese suppliers have also expanded overseas. The Beijing West Industry Group (BWI) in 2009 purchased the Delphi Ride Dynamics and Brakes business unit for approximate $100 million. The acquisition included machinery and equipment, intellectual property and certain real property, assignment and assumption of customer and supplier contracts as well as 3,000 workers in the U.S., Poland, China and Europe.
In the same year, privately-owned Wanxiang Group acquired the steering shaft business of a U.S. company, which included all related patents and intellectual property.
Since then Wanxiang has bought a number of American auto parts companies including UAI, Rockford Powertrain and Schiller.
Beijing Pacific Century Automotive System Co., Ltd. acquired Nexteer Automotive from GM for $420 million in 2010. The deal included Nexteer’s steering and half-shaft business and 22 manufacturing plants, six engineering sites and 14 customer support centers in North and South America, Europe and Asia.
Chongqing Light Industry & Textile Group (CQLT) purchased German company SaarGummi Group, a global rubber-sealant maker, for €64.14 million. CQLT obtained its advanced technologies, production lines and global sales networks.