August 21 2008.

Major hydraulic equipment producer Kayaba has purchased a Chinese partner in an effort to expand dealings with Japanese and European motorcycle manufacturers operating in China.

Kayaba spent slightly more than 900 million yen to acquire a 70% stake in Wuxi Top Absorber Co., turning it into a subsidiary. Kayaba personnel took top positions at the Chinese unit, which was renamed Wuxi KYB Top Absorber.

The Chinese subsidiary is to increase production of hydraulic shock absorbers used for the front and rear wheels of motorcycles. The sales target for such parts is 5 billion yen in 2010, up 13% from the projected figure for the current year.

The two firms had entered a partnership in 1995, which mainly involved Kayaba providing production technologies.

The latest acquisition is seen as beneficial to both sides. Kayaba did not have any production facilities for motorcycle parts in China, and Wuxi KYB Top Absorber had been seeking to improve its technologies and product quality.

Source: The Nikkei Thursday morning edition