Nanterre, France -- French automotive supplier Faurecia announced 30 June that it has signed an agreement with the Changchun municipality in China's Jilin Province and with local automotive supplier Xuyang Group, in which it holds a majority stake. Faurecia will take an 18.75 percent stake in Xuyang Group, through a reserved capital increase, becoming the strategic shareholder.
Seating and interiors supplier Faurecia said its aim with this move is"to accelerate the development of its activities in China."
Xuyang is one of the main suppliers to China's first car manufacturer, the FAW Group (First Auto Works), and its international affiliates, which include FAW-VW (Audi and Volkswagen).
Faurecia said this agreement, which was first mooted last December, will extend the French firm's scope in China in three strategic areas:
• Complete seats: covered by the joint-venture Changchun Faurecia Xuyang Automotive Seat Co. Ltd (CFXAS), which specialises in seat frames and is owned 60 percent by Faurecia and 40 percent by Xuyang Group;
• Interior systems, building on Faurecia's Interior Systems' existing plant in Changchun. This becomes a joint-venture held 60 percent by Faurecia and 40 percent by Xuyang Group; and
• Acoustic modules and interior trim, covered by Xuyang Group plants which will be brought to the joint venture, held 40 percent by Faurecia and 60 percent by Xuyang Group.
The companies finalised the agreement in a ceremony watched by Zhuji Wang, vice-governor of Jilin Province, Yejing Zhu, president of the People's Municipal Assembly of Changchun, Jie Cui, mayor of the municipality of Changchun and Yann Delabriere, chairman & ceo of Faurecia.
Changchun is one a major vehicle production centre in China, in part from the presence of FAW and its joint-ventures with Volkswagen, Toyota and GM. These produce some 1.5 million vehicles in 2009, with an objective of making 2 million vehicles a year from 2011 and 3 million a year in five years time.
Faurecia notes that China is a strategic area for its development. It has 17 plants in China as well as four R&D centres, with some 4000 employees. Faurecia's 2009 sales in China were Euro 670 million, and the group aims to grow this by 2014, to Euro 1700 million. Faurecia aims for Asia to account for 15 percent of group sales in 2014 (versus 7 percent in 2009).