Auto components major Sona BLW Precision Forgings (Sona Comstar) has signed a binding term sheet with China’s Jinnaite Machinery Co. (JNT) to establish a joint venture (JV) for manufacturing and supplying driveline systems and components to automotive manufacturers in China and globally.
Image Credit: Sona Comstar
As per the stock exchange filing on Sunday, Sona Comstar will invest USD 12 million, while JNT will contribute USD 8 million in assets and business during the first phase. The JV is slated to begin operations in the second half of the current financial year, marking a key milestone in Sona Comstar’s expansion into the Chinese electric vehicle (EV) market.
“Sona Comstar, a leading global supplier of driveline solutions for various automotive segments, is strategically expanding its presence in the faster-growing Asian markets,” the company said in the filing.
Jinnaite Machinery, which operates a foundry that leverages patented technologies for complex castings and moulds, holds 63 patents, 36 proprietary technologies and has contributed to five Chinese national standards. Its strong customer base includes leading automotive OEMs in China, North America, Europe and Japan.
Referring to China’s dominant EV market, Sona Comstar noted that any company aspiring to be a global EV supplier must be part of the Chinese supply chain.
“As the largest electric vehicle market in the world and a leader in EV technologies, China offers tremendous opportunities for innovation and growth. By leveraging the strengths of both partners, this venture is well-positioned for strong growth, and it has the potential to become a key supplier of driveline solutions for electric vehicles in the region. With a robust order book already in place, we expect operations to commence later this year,” said Vivek Vikram Singh, MD and Group CEO of Sona Comstar.
The JV will cater to both EV and non-EV automotive customers as part of Sona Comstar’s broader strategy to strengthen its footprint in Asian markets, including India, China, Japan and South Korea and expand its presence in North America and Europe.
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