China was Delphi Corp.'s most profitable market in 2002 and remains one of its most profitable.
Delphi does not disclose profit figures per region, but it confirms China's top performance. The company posted a profit of $343 million last year compared with a loss of $370 million in 2001.
The world's largest auto supplier is bullish on its future in China. Each of the next five years, Delphi China expects to at least maintain the average 24 percent annual revenue growth it has had since opening its first office in China in 1993.
"China OEMs are talking about growth," says Jinya Chen, president of Delphi China. "GM, Ford, Chrysler, VW, Honda, all of them are talking about over 20 percent growth. Delphi has no other choice than to keep our growth. We have to be No. 1 or No. 2."
With its huge potential customer base, China has attracted several automakers that have set up ventures there with Chinese automakers.
Though labor is cheap in China - about $363 a year for the average factory worker - many materials are not, and the country's infrastructure can be challenging, says consultant
J Ferron, a partner with PricewaterhouseCoopers LLP in Detroit.
"It's not just a cost-of-labor issue for any supplier but rather what product strategy and partner strategy they have," Ferron says. "On both counts, Delphi has done the right thing."