China Automotive forms JV with Beijing Automobile

China Automotive Systems (China Automotive), a power steering components and systems supplier in Chi

The new JV, Beijing Hailong Automotive System, will design, develop and manufacture hydraulic and electric power steering systems and parts. It will be a 50:50 ownership between China Automotive and Beijing Automobile. Four members of the JV's seven-person board of directors will be appointed by China Automotive, with the remaining three appointed by Beijing Auto.

According to China Automotive, a new production facility is expected to be completed and operational within 18 months, with designed capacity for 300,000 units of hydraulic and 200,000 units of electric power steering systems plus parts. This structure will be located approximately 70km from Beijing airport and 110km from port at Tianjin to provide cost-effective shipping. The total investment is expected to be approximately $20m, with $10m expended in first 12 months, to be equally shared by both JV partners.

The China Automotive research institute will work with Beijing Auto research institute to develop new steering models to meet the specific needs for the vehicles produced by Beijing Auto.

Hanlin Chen, chairman of China Automotive, said: "We are very excited that Beijing Auto has selected CAAS as its trusted strategic partner for these key safety-related steering units to support their expansion plans. This JV is another milestone after our JV with Chery Auto in 2007, and Beijing Auto adds to our list of leading Chinese brands who rely on us for advanced, highly reliable steering units. Our new JV is further acknowledgement of our design and manufacturing expertise."