Going Global

Beijing-based ASIMCO Technologies Ltd., a diversified automotive parts supplier and a big player in China, is going global.

Stitched together by an investment group beginning in 1994 via equity stakes in several Chinese suppliers, ASIMCO now is entering a new phase, founder, Chairman and CEO Jack Perkowski tells Ward's.

That new stage includes massive planned investment, a bigger presence in Europe and North America and probable initial public offering.

ASIMCO generates about 30% of its $430 million in annual revenues outside China. About half come from exports and the other half are derived from its two camshaft plants in Grand Haven, MI.

The two Michigan facilities were acquired in 2003 from Federal-Mogul Corp. and mark ASIMCO's initial manufacturing foray outside China. The operations supply the automotive and heavy-duty sectors. ASIMCO has had sales offices in the U.S. since 1998.

But the supplier also is on the verge of completing an acquisition of Livonia, MI-based NVH Concepts, a producer of engine mounts and bushings that Perkowski says fits with other ASIMCO products and will help the company meet demand in China for quieter, smoother-riding vehicles.

“In China, the NVH (noise, vibration, harshness) area is the most critical in the customer's perception of quality,” Perkowski says. China has passed new drive-by noise regulations that are tougher than U.S. standards and take effect in January. “Not only the passenger-car companies, but the diesel-engine companies in China are struggling with how do they lower the noise levels of their engines so they can meet the new standards.”

In addition, ASIMCO is in the process of setting up sales operations and looking for acquisitions in Europe, where it now has offices in Leicester, U.K.

ASIMCO will approach its global manufacturing expansion program strategically, Perkowski says, careful not to erode the cost advantages it has with its Chinese production base.

“We're very interested in higher-end companies that can bring us technology we can not only bring back to the China market but also reconfigure the manufacturing to make those companies more competitive in North America (or Europe).”

Perkowski says that was the process employed with the Michigan camshaft operations, which uses China for the casting and rough machining processes but relies on the U.S. plants for value-added finishing.

He expects international business to remain at about a third of ASIMCO's revenues going forward, because the supplier expects to grow in China along with the local industry.

ASIMCO supplies diesel-engine components and other parts. About 40% of its sales are to China's top six diesel-engine companies.