New Delhi [India], July 20 : Auto components maker Sona BLW Precision Forgings (Sona Comstar) has signed a binding term sheet with Jinnaite Machinery Co (JNT) to establish a joint venture company in China.
The JV will manufacture and supply driveline systems and components to automotive manufacturers in China and globally, Sona Comstar informed stock exchanges in a filing on Sunday.
Sona Comstar will invest USD 12 million, while JNT will contribute USD 8 million in assets and business to the joint venture in the first phase.
The JV is expected to commence operations in the second half of the current financial year, marking a significant milestone in Sona Comstar's expansion into the Chinese electric vehicle market.
"Sona Comstar, a leading global supplier of driveline solutions for various automotive segments, is strategically expanding its presence in the faster-growing Asian marketsm," said the exchange filing.
The manufacturing operations in China align with the company's strategy to expand its presence in Asian markets, particularly in India, China, Japan, and South Korea, while also working to increase its market share further in North America and Europe, it added.
Referring to China's large EV market, Sona Comstar said it is natural for any company with aspirations to be a global EV supplier to be part of the Chinese market and supply chain.
Jinnaite Machinery Co., Ltd. (JNT) operates a world-class foundry utilizing patented technology to manufacture complex castings and molds. JNT holds 63 patents and 36 proprietary technologies, and it is actively engaged in the formulation of Chinese national standards, having contributed to the development of five national standards.
Its strong customer base in the automotive, off-highway, and railway sectors, including leading Chinese automotive OEMs, as well as those from North America, Europe, and Japan, further underscores its expertise and capabilities.
The JV is expected to commence operations in the second half of the current financial year to fulfill orders from both EV and non-EV automotive customers.
Vivek Vikram Singh, MD and Group CEO of Sona Comstar, said: "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."
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor