Shanghai (ZXZC)- On October 18, Magna signed a joint-venture agreement with Huayu Automotive Systems Co., Ltd., (HASCO,600741.SH), a subsidiary of SAIC Motor. According to HASCO’s statement, it will form a joint venture with Magna International’s wholly owned subsidiary in Taichang. The joint venture’s name is Huayu Magna for the moment and is subject to the approval of the Administration for Industry and Commerce. The new joint venture has a registered capital of RMB 200 million and HASCO has an investment proportion of 50.1% while Magna has the rest.

At the initial stage, the joint venture will supply electric-drive powertrain system for a German carmaker. Both companies will give full support for the joint venture to develop core competencies in China in such fields as market development, R&D, advanced manufacturing and key parts supply.

According to HASCO, they have formed a project team for the joint venture during the preparation phase. And the new company has received letters of intent from SAIC-VW and FAW-VW and will supply products for MEB platform to VW's two joint ventures in China. It is said that the products will be put into production in 2020.  

Magna said the establishment of the joint venture is to expand its electrified powertrain offerings in China and support Magna’s first e-drive business in China. "China is the number-one growth market in the world, and they have been clear about their intended leadership in bringing hybrid and electric vehicles to market," said Don Walker, Magna CEO. "Combining strengths with HASCO helps position Magna and the joint venture for future growth and success."

HASCO stated that its efforts to deepen the joint-venture cooperation on electrified powertrain system will help the company to follow the electrification trend of auto industry and seize the market development opportunities. The joint venture will quicken HASCO’s pace on localized integrated development on NEV e-powertrain system and thus offer products and service for automakers at home and abroad.

"The new-energy vehicle (NEV) market will continue to grow at a rapid speed in China. With this trend, SAIC Motor is developing the New Four Modernization strategy focusing on car electrification, connectivity, intelligence, and sharing economy," Mr. Chen Zhixin, President of SAIC Motor and Vice Chairman of HASCO, said. "The establishment of the JV, a strong combination of HASCO and Magna's strength to initiate cooperation in NEV electrified powertrain systems, has been a milestone for HASCO to develop its core competencies in the field of key new-energy-related components, as well as a critical measure to strengthen the New Four Modernization strategy for SAIC."