Furukawa Electric Acquires China Auto Parts Affiliates

Furukawa Electric announced on Friday the firm acquires 2 affiliates and controls the 2 firms to expand automotive parts business in China. The firm acquires Hong Kong based strategic investment firm, Furukawa GP Auto Parts and Huizhou based automotive wiring harness maker, GP Auto Cable in Huizhou. Furukawa Electric uses around 2 billion yen from strategic fund, which the firm raised through equity finance in March 2005. The firm tries to expand the automotive parts sales in China to 30 billion yen in fiscal 2009 ending March 2010. Furukawa Electric established Furukawa GP Auto Parts in 1997 as 50/50 joint venture with Singapore based GP Industries. Furukawa Electric purchases 30% interest in Furukawa GP Auto Parts from GP Industries for around 1.2 billion yen. GP Industries controls 90 of GP Auto Cable with 10% share by Furukawa Automotive Parts, which is Furukawa Electric’s subsidiary to make automotive wiring harness. Furukawa Electric purchases all share of GP Auto Cable held by GP Industries for around 800 million yen. Furukawa Electric tries to expand automotive parts business in China through the acquisition. The firm tries to increase parts sales for transplants of Japanese automakers through Furukawa GP Auto Parts. Japanese automakers’ transplants represent around 80% of Furukawa Electric’s auto parts sales in China. Furukawa Electric tries to establish 4 strategic sites for automobile parts in southern, northeastern and north, eastern and central China for larger business. Furukawa Electric considers building new automotive wiring harness plant in Chongqing as majority controlled subsidiary of Furukawa GP Auto Parts.