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Faurecia, China's Chang'an sign interior systems joint venture

By: Steve Toloken

April 21, 2013

SHANGHAI -- French automotive supplier Faurecia SA used the Shanghai Auto show to unveil a joint venture with China's Chang'an Automobile Group to supply interior systems to the Chinese market, including two new factories making instrument panels, door panels and other parts.

Planned investment in the joint venture will total 293 million Chinese yuan ($47.4 million) and will include new factories in Shenzhen and Hangzhou and the transfer to the JV of the existing Chongqing factory of Nanterre, France-based Faurecia.

At the auto show, Faurecia officials said the venture was its first directly with a Chinese car maker, and said they expect it in particular to help them gain market share with two of Chang'an's international joint venture partners in China, Ford Motor Co. and PSA Peugeot Citroën.

The joint venture, called CSM Faurecia Automotive Systems Company Ltd., will be 50 percent owned by each company, with each partner contributing equally to costs of new sites, equipment development costs.

It will include work for Chang'an Ford and new models launched by the Chang'an Peugeot Citroën joint venture, known as CAPSA, Faurecia said.

It will also supply center consoles and cockpit modules, and broaden the technical cooperation between the two companies, they said in an April 20 statement.

"This is a major change for us," said Nicolas Delahegue, China vice president for Faurecia Interior Systems, in an interview at the Auto Show. "It will give us for sure more access to market share."

Beyond the joint venture, Faurecia executives said they opened four additional factories in the country in 2012, giving them 35 there, as sales hit 1.5 billion euros ($1.95 billion) last year.

"In 2012, Faurecia's growth outpaced vehicle production growth [in China] and enjoyed a 25 percent sales increase in this dynamic market," said Faurecia Chairman and CEO Yann Delabriere, in a statement. "China has already developed into the world's largest auto market with solid growth perspectives."

The company said it is targeting 3.3 billion euros ($4.3 billion) in sales in China by 2016.

Chang'an is China's fourth-largest car maker, selling 1.95 million cars last year with sales of 131.8 billion yuan ($21.3 billion). In addition to Ford and Peugeot Citroen, the company also has partnerships with Mazda and Suzuki.

Chang'an Chairman Xu Liuping said in a statement that the JV will help Chang'an "enhance our competitiveness and better achieve our goal of becoming a leading brand not only in the Chinese market but also in the global automotive market."