Magna said it would form two new joint ventures with Beijing Electric Vehicle (BJEV) for complete vehicle manufacturing as well as engineering of electric vehicles.
BJEV, an EV subsidiary of (Hyundai and Mercedes-Benz local JV partner) BAIC Group, and Magna, a global supplier and contract assembler, on Monday (18 June) signed term sheets for the new joint ventures at a ceremony in Nanjing.
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In coming months, the partners will work with authorities to implement legally binding joint venture agreements which will govern the operations of these two joint ventures.
The engineering and manufacturing joint ventures are expected to take over an existing BAIC manufacturing facility in Zhenjiang, Jiangsu Province, where the first production vehicles are planned for 2020. The plant has the capacity to build up to 180,000 vehicles per year.
The joint ventures will also be set up to offer engineering and complete vehicle manufacturing capacity to other potential customers.
"These joint venture operations mark an historic milestone for Magna. For the first time we will be providing our customers with cars engineered and built outside our complete vehicle manufacturing facility in Graz, Austria," said Don Walker, CEO of Magna International.
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By GlobalData"It's a unique capability for Magna, especially with our ability to produce vehicles with conventional, hybrid and electric powertrains, and we are excited to bring it to a market like China where there is tremendous opportunity."
"From a strategic point of view, the establishment of the JVs will benefit both Magna and BAIC to further strengthen our business growth in China", Xu Heyi, chairman of BAIC Group, said.
"Based on an open and sharing platform, we will jointly develop and manufacture premium smart electric vehicles, bringing the clean energy vehicle industry to the next level."
In April 2018, BAIC Group and Magna announced they would jointly develop a next generation smart electric vehicle architecture for China. It is expected that this vehicle architecture will be transferred to the engineering joint venture and will form the platform of the new electric vehicles to be launched in the joint venture.
China is currently the world's leading market for electric mobility. By 2020, the number of all-electric cars on China's roads is forecasted to reach around 5m.
Both joint ventures are subject to a number of conditions including agreement on final joint venture agreements and obtaining all necessary regulatory approvals.
