Faurecia says it has inked a joint venture with Dongfeng Hongtai, which will serve the Chinese company and its automotive partners for passenger and commercial vehicles.
The JV, estimated to generate sales of around EUR2bn (US$2.14bn) should complete its registration by the end of May this year and covers the development, manufacturing and delivery of automotive interior and exterior components.
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The joint venture has already been awarded business from Dongfeng Peugeot Citroën Automobile (DPCA) for their vehicles to be built in Chengdu (Sichuan province).
In the near future, the partnership will be extended to include automotive seating and emissions control technologies. It will develop its footprint in all regions of China where Dongfeng and its automotive partners are present.
A new research and development centre will be established in Wuhan (Hubei province) supporting the joint venture in product and programme development, testing and validation.
Faurecia and Dongfeng have agreed on a governance and general management scheme allowing Faurecia to fully consolidate the business of the joint-venture. Initially, the exterior business will be consolidated by Faurecia on an equity basis.
“This new joint-venture agreement with Dongfeng represents a major step forward in Faurecia’s relationships with its Chinese customers,” said Faurecia chairman and CEO, Yann Delabriere.
“We will support Dongfeng and its partners in their development of strong automotive brands with leading-edge vehicle technologies and expertise. Faurecia has grown extremely rapidly in China and has doubled its sales over the past three years, significantly outperforming the growth of the Chinese automotive market.
“This new partnership with Dongfeng Motor Corporation, which is complementary to the existing cooperation with Chang’an Automobile Group implemented in 2013, will contribute to the steady and profitable growth of Faurecia in China.”
