Johnson Controls, a manufacturer of automotive seating and overhead systems, along with door and instrument panels for car makers, recently inked a deal with Yanfeng Automotive Trim Systems, a wholly owned subsidiary of Huayu Automotive Systems (HASCO), the component group of Shanghai Automotive Industry Corporation (SAIC), to form a global automotive interiors joint venture.
The partnership will create the largest automotive interiors company in the world with revenues of approximately $7.5 billion. Yanfeng will hold the majority 70% share in the joint venture, and Johnson Controls will control the remaining 30%
“Joining our two interiors businesses is a natural extension of our already very successful existing partnership with Yanfeng in automotive seating, which has flourished over the past 15 years. It creates a strong combined company with a market leading position and a foundation for sustained global growth,” says Alex Molinaroli, Johnson Controls chairman and CEO. “This also aligns with Johnson Controls’ corporate commitment to China, which is increasingly becoming a major center for the global automotive industry.”
The new company will be headquartered in Shanghai with global engineering, development and customer centers in the U.S., Europe, China, Japan and India. The product portfolio will include instrument panels and cockpit systems, door panels and floor consoles.
The transaction is expected to close in the first half of 2015.
To support its bullish approach to China the company announced plans last year to build a second global corporate headquarters in Shanghai. Construction on the 35,000 square meter campus is expected to finish by late 2016.
Also last year, Johnson Controls signed an agreement with Zhejiang Wanfang New Materials to set up a new fabrics joint venture in Haining City, Zhejiang Province, making it one of the first Global Fortune 500 companies to invest in Haining. The new joint venture is called Zhejiang Johnson Controls Wanfang Textile Technology. It will supply major automakers in China and abroad with automotive and functional fabrics for automotive seating and interior products.
More recently, the Milwaukee, WI-based company opened a $35 million expansion of its manufacturing and research and development center in Wuxi, saying the expansion will triple its manufacturing capacity across several of its businesses to serve the growing market.
The use of nonwovens in the automotive industry is growing as consumers demand greater comfort and safety, and auto makers along with their component suppliers look to save costs by reducing the weight of a vehicle as well as lower fuel consumption and CO2 emissions.
Johnson Controls is one that is incorporating more nonwovens into the components it supplies to the auto industry.
“There is lot of interest in nonwovens for some automotive areas due to their high-speed production, low cost, easy-to-mold nature and ability to make composite materials,” says Vamsi Krishna Jasti, manager new technologies, trim and fabrics, automotive seating, Johnson Controls. “The usage of nonwovens in terms of volume and value is growing and forecasted to grow in the coming years.”
According to Krishna there are roughly 40 applications for nonwovens inside cars and nonwoven materials are now being employed in the exteriors of vehicles as well, especially as undershields and outer wheel arch liners.
Largest Automotive Interiors Supplier
Johnson Controls and SAIC’s Yanfeng Automotive Trim Systems form global joint venture for automotive interiors.
By Tim Wright, editor
Published May 29, 2014
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