China Keen on Buying German Auto Part Makers

After the purchase of two German auto parts makers, another Chinese compamy, CITIC Dicastal, one of the world’s largest suppliers of cast aluminum wheels for the automotive industry, has acquired another German car parts manufacturer, KSM Casting this July.

Located in Qingdao, Hebei Province in China, CITIC Dicastal, is the world’s largest cast aluminum wheel maker for the automotive industry. It bought KSM Casting from Cognetas, an European private equity firm focusing on leveraged buyout investments. Financial details of the transaction weren't disclosed, but according to reliable resources,  the deal was worth around EUR 300 million.

KSM Casting is a company that mainly focuses on the manufacturing of Motor Starter, driven system related parts. It has a staff of 2700 people, and it is an important supplier of Volkswagen and Daimler. Up to March of 2011, the sales of KSM Casting has reached EUR 400 million.

In order to remain competitive in technology, many China Manufacturers are considering overseas acquisition. According to a report released by Roland Berger Strategy Consultants, last year the purchases in German-speaking regions has more than doubled, and there are around 20 to 30 acquisition under negotiation. Meanwhile, the attitude of German companies has shifted from rejecting the deals to welcoming the purchases, since China’s market share is crucial to their profitability.

Before CITIC Dicastal’s purchase of KSM Casting, another two German auto part makers, Saargummi and Preh, were sold to Chinese enterprises respectively. The increase in the acquisition reveals China’s ambition in car manufacturing industry growth. Besides, according to open sources, this year Chinese companies have bought 34 enterprises in west Europe, with the transition at 7.74 billion USD, up by 500% year-on-year.

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