Truck Axle US Axle Accelerates Expansion in Chinese Market

Shanghai—Axle Manufacturing Corp., which is heavily dependent on the declining North American light truck parts market, wants to use China to diversify its auto parts supply.

Steven Proctor, president of Axle Asia, said: "We will use China to develop expertise in the design and manufacture of passenger car products. This way we can use the expertise developed here to be competitive in other markets."

The American Axle Company, headquartered in Detroit, USA, produces driveline components such as gears, transmission accessories, transfer case accessories, shafts, and forgings.

The company claims that SUVs, pickups and commercial trucks account for about 85% of its total sales.

Proctor said that China has two attractions.

On the one hand, China has a huge talent pool. He said: “You can hire high-quality engineering staff here only for a salary of 20,000 to 30,000 US dollars. The same level of personnel in the United States, the basic annual salary of 10 to 120,000 US dollars, if you count the various benefits, the workforce The cost will be much higher than China."

On the other hand, China's market is huge. Proctor said: "China is expanding new production. We can establish new contacts with OEMs to develop the products used in passenger vehicles without having to squeeze out competitors."

The American Axle Company signed a joint venture with Jianghuai Automobile Co., Ltd., headquartered in Hefei, Anhui, this month to form a joint venture, each with a shareholding of 50%, thus taking another step in this direction.

The new company named HefeiAAMAutomotiveDriveline & ChassisSystemCo. (HefeiAAM) will use the technology of American Axle from the first quarter of next year to produce shafts, power transmission devices and suspension components for passenger cars, utility vehicles and SUVs.

The new company will supply parts to two passenger cars produced by JAC. HefeiAAM will also cooperate with Chery Automobile Company.

In order to improve product quality, Chery has taken a new approach: In some of its selected models, it only purchases parts from multinational suppliers and joint ventures. The American Axle Company is one of Chery’s new partners.

The American Axle Company also operates another subsidiary in China: This wholly-owned production facility is located in Changshu City, located in the Yangtze River Delta, and opened in 2006.

Proctor said: "We have bought a large area of ​​land in Changshu. Our Changshu plant has room for expansion during design."