Hanwha Advanced Materials Corp.’s move to buy a Michigan-based car parts company is being seen by industry watchers as Hanwha Group’s attempt to expand its automotive business in the U.S. market.

The group confirmed Tuesday that its material arm Hanwha Advanced Materials Corp. recently submitted a letter of intent to buy the U.S.-based automotive materials supplier Continental Structural Plastics. CSP is a supplier of lightweight materials to the U.S.’ big three automakers General Motors, Ford and Chrysler. 

Hanwha reportedly plans to acquire a 100 percent stake in CSP and the deal is estimated to be worth about $600 million.

Other multinational companies including BASF and Mitsubishi Motors also participated in the bidding process. However, Hanwha has a high chance of winning, as industry watchers said the group has amassed more than 800 billion won ($688 million) in cash after selling off its noncore units.

Hanwha expects to see the expansion of its auto parts business in the U.S. market through the potential deal.

“We hope the deal -- if reached -- could create a synergy with Hanwha Advanced Materials Corp., which has already been doing lightweight material business in the global market,” a group spokesperson told The Korea Herald by phone.

Market analysts said Hanwha would continue to push for auto parts business down the road as the market has high potential to grow in line with the global auto trend going lightweight for better fuel economy.

“The expansion of car parts materials -- high-valued chemistry business -- appears the right choice for Hanwha following the acquisition of Samsung General Chemicals and Samsung Total last year,” said Choi Nam-gon, an analyst from Yuanta Securities.

If the deal is reached, it will be Hanwha Advanced Materials Corp.’s third overseas purchase following the acquisitions of U.S. parts maker Azdel in 2007 and German company Heycoustics last year.

Last month, the company also began operating its plant in Mexico to produce car parts such as bumper beams and underbody shields for 100,000 units of Kia’s K3 this year.

The materials maker has been supplying its lightweight car parts to major global automakers, including General Motors, Ford, Audi, BMW and Volkswagen, as well as local carmakers Hyundai Motor and Kia Motors.

By Shin Ji-hye (shinjh@heraldcorp.com)