Published on : Apr 01, 2015
Faurecia, the French car parts manufacturer made an announcement about their joint-venture deal with the Chinese state-controlled automotive group – Dongfeng. This deal was made with the intention to increase its brand name as the world's largest autos market.
Faurecia is largely owned by PSA Peugeot Citroen stated on Tuesday that the joint venture would target sales of US$2.2 billion (2 billion Euros) to the Chinese auto-maker Dongfeng and its car making partners such as Nissan, Peugeot, Kia, and Honda along with the Chinese car manufacturer’s self brands. The Chief Executive of Faurecia, Yann Delabriere informed that this deal will lead to the progressive and lucrative growth of Faurecia Company in China.
Faurecia has already been expanding its business horizons in China owing to which the sales of the previous year went up by 20 percent recording around 2.23 billion Euros. As all the foreign carmakers are expected to continue with their operations by minority holdings when it is a local joint venture, the suppliers in China have been under less restriction generally.
The Chinese auto-maker Dongfeng also holds a stake of 14% in Faurecia's parent company, Peugeot, which is acquired as a part of a 3 billion-euro bailout for the troubled French carmaker in the previous year. In spite of such car-making joint ventures, the Faurecia-Dongfeng joint business will be consolidated in the company accounts of Faurecia, and the bringing in of any new business with Dongfeng and its other partners.
The joint venture will be manufacturing and selling the Faurecia interior and exterior car parts before its expansion into seating and exhausts. Along with that a new joint research and development center will also be started at China's automotive hub at Wuhan. Any of the financial terms have not been disclosed as yet.