Delphi Expects $1 Billion China Sales
November 06, 2003 05:02:00 AM ET
BEIJING (Reuters) - The world's largest automotive parts supplier, Delphi Corp., expects sales in the booming China market to hit about $1 billion this year, a top executive said on Thursday.
In contrast to pressures facing the global auto industry -- leading to 8,500 job cuts for Delphi worldwide -- customers in China were ramping up orders for the company's accessories, the president of Delphi Automotive Systems China told Reuters.
``This year we would expect that we would reach about $1 billion sales in China,'' Jinya Chen said in an interview on the sidelines of an economic forum.
Sales in January to September this year had hit over $700 million, equivalent to total sales in 2002, Chen said.
In its first year of operations in China in 1993, Delphi sales stood at around $20 million, he said.
``We look at the China market and the accomplishments we have made. We're confident of reaching this,'' he said.
He declined to comment on net profit forecasts for the year.
Delphi Corp posted a large third-quarter loss last month, dragged down by restructuring charges including the 8,500 job cuts.
The Michigan-based firm has shed more than 17,500 jobs, or about eight percent of its global workforce, since the end of 2000 as it struggled to diversify its customer base and become less reliant on business from former parent General Motors Corp
General Motors remains a major customer for Delphi in China, along with other foreign and domestic players tapping China's car boom.
Business was thriving for auto parts suppliers such as Delphi because many auto companies were churning out one to two models a year compared to one every few years a decade ago, he said.
The evolution of China into what is now the world's fastest-growing major car market had prompted Delphi to invest $400 million in the country by the end of 2002, he said.
So far this year, it had invested an extra $12 million in a new emission-controlling product line and several more million dollars in wiring accessories, he said.
Chen declined to give details of future investments, saying only that the firm would pour money into China according to the needs of the fast-changing market, with a particular focus on updating technology.
Chen said China's swelling car market was expected to continue despite some worries of overcapacity and potential overheating.
``We do believe the market will go up. The boom will continue. The question is how big the boom will be,'' he said.
``I don't think it's a bubble at this point,'' he said.
``In China, most people think that having a car is a dream come true.''
© 2003 Reuters
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