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China Is Getting Under the Hoods of More American Cars

Chinese companies started talking a decade ago about cracking the U.S. auto market with an array of low-cost passenger vehicles. That hasn't happened, so instead they're getting under the hoods of American cars by buying up parts makers at a record pace.

Ningbo Joyson Electronic Corp. supplies windshield-washer and ventilation systems to some of the world’s biggest carmakers, including Ford Motor Co., General Motors Co. and Volkswagen AG. Last year, it spent more than $1bn buying a Michigan maker of airbags and an Indiana manufacturer of assembly-line equipment.

Now, it’s on track for potentially the biggest deal yet — using a subsidiary to bid for beleaguered air-bag maker Takata Corp. and further entrench itself in chassis sold to U.S. drivers. The deal would continue an aggressive strategy that put Ningbo Joyson at the forefront of a record $1.6bn in investments in U.S. companies by Chinese parts makers last year seeking global supply-chain access to compensate for a maturing home market.

“We’re just at the very outset of a major trend that will run over the next five to 10 years,” said Michael Dunne, president of Hong Kong-based consultancy Dunne Automotive. “If the original game plan was to export from China, now it’s clear that they will be expected to invest and create jobs in the U.S.”

There were at least seven announced auto-related deals in the U.S. involving Chinese companies last year, with the total announced value eclipsing the previous record set in 2014, according to data compiled by Bloomberg.

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