Johnson Controls launches US$7.5B joint venture with Chinese firm
The deal, with operations in China and globally, is expected to create the largest-ever global interiors company
SHANGHAI—Global industrial conglomerate Johnson Controls has struck a joint venture with a division of Chinese state-owned auto giant Shanghai Automotive Industry Corporation (SAIC) to make automotive instrument panels and cockpit systems, door panels and floor consoles.
With aggregated revenue of US$7.5 billion, the deal between Johnson and Yanfeng Automotive Trim Systems Co., Ltd.—a wholly owned subsidiary of SAIC division Huayu Automotive Systems Co., Ltd. (HASCO)— creates what the companies say is the largest automotive interiors company in the world.
Yanfeng will hold the majority 70 percent share in the joint venture, while Johnson will have a 30 per cent share. Subject to limited conditions, the deal should close in the first half 2015.
The new company will be headquartered in Shanghai with global engineering, development and customer centers in the U.S., Europe, China, Japan and India.
Current leaders in the automotive interiors segment include U.S.-based Visteon Corp., European giant Valeo, SA., embattled Detroit stalwart Lear Corp., Former GM division Delphi Automotive, and Canada’s auto sweetheart Magna.
“Joining our two interiors businesses is a natural extension of our already very successful existing partnership with Yanfeng in automotive seating, which has flourished over the past 15 years. It creates a strong combined company with a market-leading position and a foundation for sustained global growth,” said Alex Molinaroli, Johnson Controls chairman and CEO. “This also aligns with Johnson Controls’ corporate commitment to China, which is increasingly becoming a major center for the global automotive industry.”
Johnson is in the midst of building its China corporate headquarters in Shanghai Hongqiao Linkong Economic Zone. The 35,000 square-meter campus is set to be completed by late 2016 and will be home to more than 1,200 employees
The agreement excludes certain facilities in both Yanfeng and Johnson Controls’ existing networks. Johnson Controls will continue to operate those within its network as part of Johnson Controls’ Automotive Experience business.
Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 170,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and disciplined focus on operational execution, we are committed to delivering value to shareholders and making our customers successful. In 2014, Corporate Responsibility Magazine recognized Johnson Controls as the #12 company in its annual “100 Best Corporate Citizens” list. For additional information, please visit