German auto interior and exterior components supplier Peguform GmbH has formed its first joint venture in China to supply door panels to international as well as local automakers.
Changchun Automotive Plastics Technology Co. is a 50-50 joint venture between Peguform, based in BÃ¶tzingen, and privately owned Chinese interior maker Changshu Automotive Trim Co. (CAIP).
With a total investment of $200 million, the new venture has about 260 employees and an initial capacity of 300,000 units of door panels per year.
The new company already has secured a contract to supply door panels to the new Audi A4 sedan, said Peguform Chief Executive Officer Gerhard Boehm. Based on the Audi B8 platform, the sedan will be made at FAW-Volkswagen Automotive Co. in Changchun later this year.
It also will supply door panels to Chinese automaker Chery Automobile Co. Ltd.'s new joint venture with Israeli company Quantum, Boehm said.
Despite high logistic costs, Peguform's facilities in Europe will purchase some door panel components from the venture as well as from subsidiaries of its joint venture partner CAIP, he said.
In addition to door panels, Peguform and CAIP plan to jointly produce other interior and exterior products, added Luo Xiaochun, CAIP founder and chairman.
Peguform is a leading European supplier of bumper systems, front-end modules, cockpits and interior systems. Key customers - including Audi, VW and BMW - made up 55 percent of its 2006 sales. Sales in 2007 reached 1.3 billion euros ($1.8 billion), of which 40 percent was generated outside of Germany.
Based in Changshu, CAIP runs five wholly owned subsidiaries in Changchun, Beijing, Wuhu and Changshu. Those companies supply instrument panels, consoles, door panels and sunshades to automakers including FAW-VW, Shanghai General Motors, Chery and Beijing Benz.
CAIP operates two other joint ventures, both with Intier Automotive, a division of Aurora, Ontario-based Magna International Inc. - one in Changshu, the other in Changchun. Both ventures make instrument panels and cockpits.
CAIP's 2007 sales totaled 2 billion yuan ($263.4 million).