NEW YORK - Chinese auto parts maker BWI Group (Beijing West Industries) is the frontrunner to acquire the brakes manufacturing unit of German automotive supplier Robert Bosch GmbH, according to a BWI manager in the United States.

"The (Bosch) deal is really to strengthen the capacity of BWI's business in brakes and suspension systems," said Steve Lin, an engineering manager at BWI Group's Michigan office.

When China Daily reached Bosch representatives at its Michigan office, the company couldn't confirm or comment on the deal.

In late May, Reuters reported that Bosch was seeking an Asian buyer for its brakes business and hoping to divest by the end of the year.

"It's clear that Japanese, European or American competitors wouldn't want to buy it because it wouldn't provide access to new markets, but a (Chinese) buyer would receive opportunities to markets they didn't have access to," said Paul Haelterman, vice-president and managing director at IHS Automotive Consulting in Michigan.

On July 26, Beijing-based BWI Group, which is a supplier for brake and suspension systems, formally filed an application to the Beijing Municipal Commission of Development and Reform for approval to bid on the deal.

The application was filed under State-owned Shougang Group, one of China's largest steel companies and one of BWI's stakeholders. "It's a great way to bring in modern technology (to a Chinese company)," Haelterman said.

Lin said BWI is looking at Bosch's brakes division of about 20 facilities in 34 sites in Europe, Asia and Australia. The division generates annual sales of about $1.23 billion and employs roughly 5,000 people.

Reuters reported that two sources familiar with the impending deal said the auto-parts maker hopes the business will boost revenue by $700 million. BWI Group made a $100 million purchase of former Delphi Corp's Ride Dynamics and Brakes unit in November 2009.

Bosch has offices in both China and South Korea. Bosch's sales in South Korea were $2 billion in 2010, while in China its sales were more than $5 billion during the same period.

By the end of 2015, Bosch aims to have some 50,000 staff members working in China, according to the company's website.

Lin said the booming auto market in China could also help Bosch's business.

Chinese auto companies have recently attempted to build upon their existing brands and improve technology through global mergers and acquisitions in recent years.

Last August, Zhejiang-based carmaker Geely Holding Group completed a $1.5 billion purchase of Volvo AB from Ford Motor Co. It was the biggest foreign auto acquisition for a private Chinese company.

"We are now entering a period where Chinese carmakers are starting to expand beyond China but are doing it in a very cautious way. They are being careful on how they want to expand," Haelterman said.

China Daily