Mando Corp., the auto parts arm of South Korea`s Halla Group, has launched go-local campaign in China against a challenging environment in the world’s biggest vehicle market where local brands and electric vehicles have made fast ascension under state backing.

According to sources on Tuesday, the company’s joint venture Mando-Hella Electronics began to produce radar sensors and other advanced driver assistance system (ADAS) components at its Chinese plant in Suzhou, Jiangsu Province this month.

It is the first time that Mando-Hella has shipped ADAS components through China. The 50:50 JV founded by Mando and Germany’s Hella Electronics in 2008 has produced vehicle electronic control units and ADAS based on Mando’s design in Korea.

ADAS is part of a semi-autonomous vehicle system to alert the driver of the car’s lane departure, potential collision, drowsy driving, and automatic parking. In 2014, Mando-Hella independently developed short, mid and long-range radar sensors, which are the keys to ADAS.

Mando is also going all out to diversify its sales channels in China beyond its mainstay source of revenue, Hyundai Motor and Kia Motors. Industry sources say Mando recently won a deal to supply its ADAS to Hozon, a new Chinese electronic vehicle brand founded in 2014. Hozon manufactures `E-TAKE` and `U` models, which are compact EV sport utility vehicles.

In 2016, Mando stroke a deal to provide more than 50,000 units of ADAS to Southeast Motor and other Chinese car brands.

The Korean auto parts maker’s restructuring of its production and sales channels is part of the company’s efforts to recover sales and profitability in the world’s biggest car maker that have deteriorated sharply this year due to a plunge in car sales of its key customers Hyundai Motor and Kia Motors in China.

Mando posted 51.7 billion won ($42.6 million) in operating profit over sales of 1.46 trillion won in the second quarter that ended on June 30. Sales edged up 2 percent from a year ago, but operating profit faltered over 20 percent, following a 25 percent decline in the previous quarter.

By Lee Jong-hyuk and Minu Kim

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