Fraurecia to set up two new joint ventures with Xuyang Group
To further explore the Chinese market, French auto parts supplier Frauceia announced it will establish two new joint ventures with its Chinese partner Xuyang Industry Group Co. in the northeast China city of Changchun.
The two companies set up their first joint-venture, Changchun Faurecia Xuyang Automotive Seat Co. in 2001. It is 60 percent owned by Faurecia and 40 percent by Xuyang.
Under the joint venture agreements the two companies have signed, one new venture will produce interior systems while the other will make acoustic models and floor carpets.
Details on investments and production capacity of the two new joint ventures are not available. Faurecia expects to finalize these agreements during the first half of 2010.
Xuyang Group mainly supplies car carpets and seats to state-owned Chinese automaker China FAW Group Corp. and FAW's joint ventures with Volkswagen AG and Toyota Motor Co. It is 52.3 percent owned by the Changchun municipal government and 27 percent by Ningbo Huaxiang Group Co., a private Chinese auto parts maker.
Besides the joint venture agreements, Faurecia has also inked a deal with the Changchun government to acquire a stake in Xuyang Group. The size of the equity stake is not disclosed.
Meanwhile, Faurecia and Xuyang Group have also agreed that their existing joint venture, Changchun Faurecia Xuyang Automotive Seat Co., will start producing complete seats. The venture now only makes seat frames.
