All-wheel drive technology to be produced by Chinese joint venture for the first time

Engineering group GKN is to expand production of its all-wheel drive (AWD) driveshaft technology in China through an extension of its Chinese joint venture, Shanghai GKN Driveshafts.

The increase in domestic production will be achieved by transferring ownership of its wholly-owned AWD factory in Shanghai and licensing of the technology to its Chinese joint venture, Shanghai GKN Driveshafts (SDS).

All-wheel drive technology, which delivers constant power to all four wheels of a vehicle automatically, is found in many popular urban SUVs, such as the Range Rover Evoque, where it is seen as a consumer-friendly 4×4 option, and in high-end executive car ranges from carmakers such as Audi and BMW.

SDS is half owned by GKN, 35% owned by Chinese automotive supplier Huayu and 15% owned by Chinese investment companies. The joint venture runs 8 factories that produce sideshafts and driveshafts for the Chinese market.

Andrew Reynolds Smith, chief executive of GKN Automotive, said: “China is the world’s largest car market and today’s announcement provides a platform to accelerate our business in the fast growing Chinese SUV and all-wheel drive market. This is a very important step as we continue to grow by leveraging GKN’s leading technology and global footprint.”

Vehicle production in China is expected to continue to grow strongly, said GKN. A key driver of this growth comes from the demand for SUVs and AWD vehicles which are outgrowing the market.

GKN said the addition of the AWD technology to its domestic portfolio in China would leverage its success elsewhere in the world to take advantage of the fastest growing segments of the Chinese car market.

The expansion of the joint venture also covers the production and technology of GKN’s electric-drive systems.

The announcement comes shortly before the start of Chinese car show Auto Shanghai 2013, which opens April 21.