DETROIT (July 5, 10:50 a.m. ET) — Visteon Corp. has ended a planned deal that would have sold the bulk of its auto interiors business to a Chinese auto supplier.
Visteon had “thorough discussions” with Shanghai-based Huayu Automotive Systems Co. Ltd. to sell most of the interiors business to Huayu's Yanfeng Visteon Automotive Trim Systems Co. Ltd., but announced in a July 4 news release that they could not reach a final agreement and terminated the companies' memorandum of understanding.
“Both parties worked hard to move the agreement forward, but there were a number of items that kept us from doing so,” said Don Stebbins, chairman and CEO of Visteon, based in the Detroit suburb of Van Buren Township.
Visteon's interiors business is a global operation with $4 billion in annual sales and 60 facilities in 16 countries. Yanfeng Visteon originally opened as a joint venture with Visteon but has grown independently of the North American supplier. YFV opened its first North American injection molding unit near Detroit in 2011.
Visteon will now seek “alternative solutions to maximize value creation” while maintaining quality parts production for its customers, the company said.
Meanwhile, American auto components maker Key Safety Systems is expanding in China, opening a new steering wheel factory in Beijing with its joint venture partner, Yanfeng Key Safety Systems (Shanghai).
Sterling Heights, Mich.-based Key said in a June 27 announcement that production has started and the first shipments to customers are scheduled for August.
It will initially employ 100 people and occupy 2,000 square meters of the new factory, which has room to handle additional capacity as other product lines, including airbags and seat belts, phase in.
Separately, the company also said that the Yanfeng Key joint venture has started construction on a 50,000 square meter facility in Shanghai's Pudong district. It did not give further details on that factory.
Key said China is its fastest growing market. Globally, Key said its revenues were up 25 percent in 2011 and it gained market share. It anticipates double-digit growth in 2012, with another gain in market share.
Yanfeng Key Safety Systems is a joint venture between Key and Yanfeng Visteon.
Steve Toloken, Plastics News' Asia bureau chief, contributed to this report.