By Soyoung Kim and Deepa Seetharaman
NEW YORK/DETROIT (Reuters) - Johnson Controls Inc
The unit's performance was weaker than industry bidders had expected, disappointing some interested parties and prompting Johnson Controls to reach out to a broader group of buyers, the people said. The company had not included private equity firms earlier in the auction process, they added.
U.S. auto parts maker Visteon Corp
Representatives for Delphi, Huayu and SAIC did not immediately reply to requests for comment. A spokesman for Visteon declined to comment.
"Johnson Controls has been marketing its electronics business for divestiture," the company said in a statement that did not directly address the private equity talks. "We have experienced strong interest from multiple strategic buyers. The process is proceeding as previously outlined."
Johnson Controls, the diversified industrial conglomerate, put its automotive electronics unit on the auction block earlier this year to focus on its higher-margin businesses: building controls, next-generation car batteries and car seating.
The inclusion of private equity buyers may be a sign that the sale process is struggling, some of the sources said. But one analyst said Johnson Controls' electronics unit may fare better under private equity's wing rather than a supplier.
"Technologically, it could improve under private equity because it would likely be more nimble and, depending how much cash was put into it, potentially quite innovative," said IHS Automotive analyst Mark Boyadjis.
Johnson Controls had sales of $1.4 billion in automotive electronics for fiscal 2012. Like other suppliers, the company has grappled with industry-wide pressure on margins, low vehicle production in Europe and increased competition from China.
In October, the Milwaukee, Wisconsin-based company separated its car seating from its interiors and electronics businesses, saying that economic and competitive characteristics between seating, interiors and electronics are "increasingly different."
(Reporting by Soyoung Kim in New York and Deepa Seetharaman in Detroit; Editing by Bob Burgdorfer and Tim Dobbyn)