Asia's uncertain economy has not slowed Delphi Automotive Systems' expansion into China.
General Motors' parts-making subsidiary expects its Chinese sales to top $500 million in 2000, a big jump from $100 million last year.
The increase reflects Delphi's expanding network of factories in China, which now includes 15 ventures and represents a $350 million investment.
Marcus Chao, president of Delphi China, said he does not expect turmoil in Southeast Asia to spill over into China in the near future.
'We are somewhat immune from this crisis,' he said after addressing the Automotive News World Congress in Detroit last month. 'In the long term, I don't know.'
Delphi's sales target partly reflects the anticipated launch of GM's auto assembly plant this year in Shanghai, which Delphi will supply. Delphi is also a major supplier to other large automakers.
But China's automakers face considerable uncertainty. Over the past decade, China's auto industry grew 13 percent annually - the world's fastest-growing market.
The growth slowed to 1.2 percent in 1996 and 7 percent last year, however. Some analysts predict that Chinese vehicle production will exceed 2.0 million cars and trucks in 2000, up from 1.5 million last year.
Chao says that prediction is too optimistic, but he adds that automakers can count on rapid growth.
Still, automakers and suppliers are finding it hard to make money. About 140 manufacturers build vehicles there, and more than 2,000 suppliers produce parts. Among the automakers, only Volkswagen AG produces more than 100,000 cars annually. That makes efficient production very difficult, Chao said.
Delphi is not yet profitable in China but expects to turn a profit soon, Chao said. Moreover, he advises other suppliers not to wait until the Asian crisis subsides.
'Today, China's automotive market may not be the world's most profitable and stable one,' said Chao. 'However, the future looks promising. If you want to enjoy a piece of the future market pie, you had better get your foot in the door today.'