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The world's second largest car-parts supplier, Visteon Corporation, has set up a new factory in Dalian, a port city in Northeast China's Liaoning Province.

 

Covering 90,000 square meters, the Halla Climate Control Dalian Co Ltd will produce air conditioning components including compressors and sub-components for major carmakers in the Asia-Pacific region.

 

Total investment for the plant, which has a designed annual production capacity of one million compressors, reached US$65 million, said Donald Stebbins, president and chief operation officer of the US-based firm.

 

"The opening of the plant is proof once again of Visteon's continued commitment to China and the Asia-Pacific region. Visteon has been actively expanding in China and Halla Climate Control Dalian is another important step in our growing manufacturing footprint," he said.

 

Headquartered in Daejeon of South Korea, Halla Climate Control (HCC) is a leading producer of automotive air conditioning components in South Korea, taking up at least 50 percent of market share in the country. In 1999, Visteon became the majority shareholder of HCC, owning 70 percent of its equity shares. The remaining 30 percent are public shares circulating in the local stock exchange.

 

The Dalian plant is the second such plant for Visteon in China. The first, Visteon Climate Control Beijing, was a US$29.8-million joint venture, co-established by Visteon and Beijing Automotive Industry Holding Corporation. It opened in August 2004. Visteon owns 80 percent of the facility.

 

Both the Beijing and Dalian plants will serve as suppliers for Beijing Hyundai Motor Company, as well as other major automakers in China and the Asia-Pacific region, such as Daewoo, said Shin Young Ju, president and chief executive officer of HCC.

 

"Our longstanding relationship with Visteon has generated yet another opportunity to showcase our quality products," he said.

 

"We are convinced that the HCC Dalian plant will be as successful as our other operations."

 

A listed company on the New York stock exchange, Visteon is only second to Germany-based Bosch in the auto parts market. Its products include electronic parts and climate control items.

 

The latter contributed about US$3.5 billion to US$4 billion to its annual revenue.

 

So far, Visteon has set up 21 enterprises in China, of which 19 are joint ventures with major automobile companies. Shanghai is home to the company's Asia-Pacific headquarters as well as its research and development centre.

 

Over the past few years, Visteon has achieved great success in the region, especially in China. However, it has seen big losses in North America and Europe, which have pulled down its overall global performance, said experts.

 

Visteon's senior managers were unwilling to release figures regarding profit and market share in China and the Asia-Pacific region.

 

But one company insider told China Daily earlier this year that Asia-Pacific countries contributed at least one third of its global output last year. China is the largest contributor in the region.

 

The company's 2005 annual report showed it was still running in the red last year with a net loss of US$270 million, on total sales of US$17 billion.

 

However, the company has started to get back into the black since the beginning of this year, after it transferred 23 loss-making facilities to its former parent company Ford.

 

Visteon earned US$3 million, or 2 US cents per share, during the January-March period compared with a loss of US$163 million, or US$1.30 per share, during the same period of last year.

 

(China Daily May 25, 2006)