PARIS - Valeo SA will invest up to $630 million in new factories in China in the next two to three years.
The planned investment underscores the ambitious plans the French Tier 1 supplier of electronics, thermal systems and transmissions has in the world's fastest-growing automotive market.
Valeo also plans to increase its purchasing from Chinese component makers to about $1.3 billion by 2006 from about $383 million in 2003. A sizeable part of that growth will come at the expense of western European Tier 2 suppliers.
"We want to buy a lot from suppliers in China," says Valeo CEO Thierry Morin. Morin said he foresees continued strong growth in the industry and wants Valeo to be part of it.