Johnson Controls’ deal to form a huge new interiors joint venture with a components subsidiary of SAIC is a step closer to reality now the parties have signed a further agreement to form the new entity.

Johnson Controls and Yanfeng Automotive Trim Systems Co., Ltd., a wholly owned subsidiary of Huayu Automotive Systems Co., Ltd. (HASCO), the component group of Shanghai Automotive Industry Corporation (SAIC), have announced the signing of an agreement for a global automotive interiors joint venture.

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Johnson Controls said the new joint venture will be called Yanfeng Automotive Interiors, and will be the largest automotive interiors company in the world with revenues of approximately $8.5 billion with a backlog to reach $10 billion in the next few years. Yanfeng will hold the majority 70 percent share in the joint venture, and Johnson Controls will have a 30 percent share.

The companies signed a definitive agreement in May 2014 to form this joint venture, which is expected to begin operations in July 2015, subject to receipt of all regulatory approvals.

“Combining our global interiors businesses enhances our ability to serve our automotive customers throughout the world,” said Alex Molinaroli, Johnson Controls chairman and chief executive officer. “This will result in an automotive interiors company with unmatched scale, capabilities and reach.”

The new company will be headquartered in Shanghai with more than 90 manufacturing, global engineering, development and customer centers in the United States, Europe, China, Japan and India. The product portfolio will include instrument panels and cockpit systems, door panels, floor consoles and overhead consoles.

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Johnson Controls said the interiors joint venture agreement is the latest in a series of recent strategic transactions taken by the company to both strengthen and rebalance its portfolio of operating businesses.