NEW YORK/DETROIT (Reuters) - Johnson Controls Inc (>> Johnson Controls Inc) is speaking to private equity firms about selling its roughly $1 billion automotive electronics unit, after buyout interest from many rival auto parts suppliers faltered, according to several people familiar with the matter.

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 (>> Visteon Corp) and Huayu Automotive Systems Co (>> HUAYU Automotive Systems Co Ltd), a parts maker majority owned by Chinese carmaker SAIC Motor Corp (>> SAIC Motor Corporation Limited) are among the industry bidders still interested, the sources said.

Delphi Automotive (>> Delphi Automotive PLC) had been part of the bidding process until recently. Two sources said late on Monday that the U.S. supplier is no longer pursuing a deal.

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)

By Soyoung Kim and Deepa Seetharaman