Auto parts maker Alpha to acquire Chinese plated parts maker

26, Apr. 2019

TOKYO, NNA - Japanese auto parts maker Alpha Corp. will take over a Chinese plated parts maker to boost sales of such components subject to tighter environmental regulations.

Alpha said Wednesday its Chinese subsidiary, Alpha (Guangzhou) Automotiveparts Co., plans to buy 52.91 percent stake in Guangdong Advancon Auto Parts Co. for 4.5 million yuan ($6.7 million) through a private share placement.

Alpha said in a statement that five current investors will hold the remaining 47.09 percent stake after its share purchase.

The Yokohama-based firm has the Guangzhou unit and two other manufacturing arms in China. Its Advancon purchase comes as it is trying to achieve independent output expansion and cope with stricter environmental regulations.

The three Chinese units supply auto parts mainly to local arms of Nissan Motor Co., Honda Motor Co. and Volkswagen AG, Alpha spokesman Katsutoshi Watanabe told NNA on Thursday.

Established in 2014, Advancon produces plated parts for car exteriors such as door handles and supplies them to major local auto parts makers and carmakers. Its biggest client is local electric vehicle maker BYD Co.

But it fell into red ink in the past two years as it tried to rapidly increase its customer numbers, while struggling to maintain high product quality, Watanabe said.

Advancon incurred a 26.2 billion yuan net loss on sales of 43.3 billion yuan in 2018, according to the statement.

Alpha plans to enhance quality management to improve Advancon's financial standing by utilizing its cutting-edge molding, plating and painting facilities, the spokesman added. (NNA/Kyodo)