BMW Group and the SGL Group have agreed to establish a joint venture to produce carbon fibres and textile semi-finished products (CFRP) for use in vehicle construction. The total investment is EUR90m in the first development phase.

The joint venture will be operated through two companies, one based in North America (SGL Automotive Carbon Fibers), and the other in Germany (SGL Automotive Fibers). The BMW group holds 49% of the shares and the SGL Group 51%. The two groups will be equally represented in the management of the two companies; major corporate decisions must be made unanimously by both partners. The joint venture will initially create around 180 new jobs in North America and Germany. Its establishment is subject to approval by the cartel authorities.

"This joint venture is designed to be a classic win-win situation. We are acquiring pioneering future technologies and raw materials that we need for our Megacity Vehicle on competitive terms. The SGL Group is moving into the automobile business with us as a strong partner", BMW chairman Norbert Reithofer said. "With our concepts within project i, we are breaking new ground when it comes to vehicle architecture, lightweight design and the use of materials," he added.

SGL CEO Robert Koehler said: "This joint venture with the BMW Group is a milestone for the use of carbon fibres on an industrial scale in the automobile industry. For the first time, carbon fibres are taking on an important role in series vehicle manufacture. This confirms our strategy and shows that carbon fibre technology is becoming increasingly important in the materials substitution process to lighter material. This material will help to reduce CO2 emissions and save our natural resources".

In the Megacity Vehicle, which will be launched under a BMW sub-brand in the first half of the next decade, the high-strength yet ultra-light material will make up a significant proportion of the materials used. The combination of the advanced CFRP fibres developed by the SGL Group and the BMW Group's expertise in the industrial manufacture of CFRP components is making it possible, for the first time, to install CFRP on a large scale in a series vehicle at a competitive cost.

The high energy requirement for the production of carbon fibres is to be met completely by environmentally friendly hydropower. This is one of the preconditions for the production site of carbon fibres in North America. The raw material is then processed into a carbon fibre fabric at the second location in Germany. Parts and components will then be made from this light-weight durable fabric within the BMW Group.

BMW's Megacity car is an offshoot from the carmaker's 'Project i', tasked to develop new mobility concepts for urban areas with more than 10m inhabitants. BMW recently enlisted a Bosch and Samsung SDI joint venture to supply lithium-ion battery cells for the vehicles.

Reuters noted the deal was the latest in a slew of joint ventures clinched by SGL to branch out into the industrial use of its carbon products.

It combined its carbon ceramic brake discs business with Italy's Brembo in May and last year it set up a company to supply carbon-fibre composites for the car industry with Germany's Benteler and established a maker of wind rotor blades with German shipyard Abeking & Rasmussen.

SGL is looking to reduce its dependence on its best-selling graphite electrodes for steel furnaces, trying to boost sales of carbon fibre and composite carbon materials to makers of aircraft, windmills and cars.

SGL also said on Thursday it took a one-third stake in a joint company set up with Japan's Mitsubishi Rayon to produce chemicals needed for carbon fibre, according to the news agency.