LIPPSTADT, GERMANY (June 5, 2:40 p.m. ET) — German auto supplier Hella KGA Heuck & Co. is forming a joint venture with Chinese automaker BAIC that will provide full entry into lighting production for the passenger vehicle market in China.
Hella's wholly-owned Chinese subsidiary, Hella Baifang Automotive Co. Ltd., opened in 2002 but currently provides lighting for commercial vehicles. With the proposed partnership, Lippstadt-based Hella will now have access to full passenger vehicle lighting business.
Hella announced a cooperation agreement with BAIC – Beijing Automotive Industry Holding Co. Ltd. of Beijing – in a June 1 news release. The companies expect to complete a joint venture by the end of this year, with a 50-50 ownership of Hella's HBL lighting group in China. HBL currently has locations in Beijing and Changchun.
China is the largest single car market in the world, with an expected 20 million passenger cars expected to be sold this year. Forecasters expect car sales to top 30 million vehicles annually by the end of this decade.
BAIC sells under its own name, but also has manufacturing joint ventures in place with Daimler AG and Hyundai Motor Co.