ThyssenKrupp AG will increase the range of vehicle parts it produces in China, supporting its customers as they attempt to increase their share of the growing market. "We will make a complete portfolio of parts in China and will make selective acquisitions here," said Wolfram Morsdorf, chairman of the executive board of ThyssenKrupp Automotive.

The construction of the firm's new auto parts plant in Dalian is due to begin today.

The plant will have an initial output of 1.3 million camshafts a year, with capacity finally expanding to 5 million.

Shanghai Volkswagen and FAW-Volkswagen will be the production centre's main customers.

The company will start to move assembly facilities for the front axle it manufactures for General Motors to China at the end of this year, according to Morsdorf.

ThyssenKrupp will take orders from other auto makers in China in the future, he said.

The firm is considering investing in crankshaft manufacturing.

"Negotiations are going on with potential joint venture partners in China, which may be realized in 2005 or 2006," said Morsdorf.

ThyssenKrupp, the world's largest stainless steel producer, also makes lifts.

The increasing presence of the world's leading auto makers in China has driven ThyssenKrupp to expand its capacity.

Though experiencing a slowdown, the market is still an attractive prospect for auto companies that see potential growth found nowhere else.

"China tops the list of where ThyssenKrupp Automotive will exploit growth opportunities," said Morsdorf.

He expects the company to invest US$400 million in the country in the next five years.

ThyssenKrupp Automotive has been involved in production in China since 1995. It currently has six domestic joint ventures producing springs, steering components, camshafts and body and chassis parts.

Morsdorf forecast that China will produce 10 per cent of the firm's global vehicle parts sales by 2010. Currently, the share is less than 1 per cent.

ThyssenKrupp Automotive posted revenue of 7.31 billion euros (US$9.54 billion) in 2003-04, accounting for nearly one fifth of group sales. About 1 per cent of that came from Asia but no breakdown for China was available.

According to Alfred Wewers, ThyssenKrupp's representative in China, the group is preparing to set up a holding company with an investment of US$100 million in June or July this year. The holding company will be able to provide better services for its decentralized business units in China, including the auto parts department.