Global automotive supplier Magna International Inc. has signed a framework agreement governing its electric vehicle manufacturing joint venture in Zhenjiang, China, with BAIC Group (Beijing Automotive Industry Holding Co., Ltd.) and the Zhenjiang government. The transaction, which is pending regulatory approval and other closing conditions, is expected to close in the fourth quarter of 2019.
China is the leading market for electric mobility, with around 700,000 electrified cars sold in 2017. By 2020, the number of all-electric cars on China’s roads is forecast to reach around five million, helped in part to subsidies and quotas given by the Chinese government. In June 2018, Magna and BJEV (Beijing Electric Vehicle Co. Ltd), a subsidiary of the BAIC Group, announced they would jointly engineer and build premium electric vehicles for customers in China. In January 2019, the two companies opened a new engineering centre and announced the groundbreaking of a test centre in Zhenjiang.
This new joint venture in Zhenjiang is to be controlled by an affiliate of the BAIC Group and represents Magna’s first investment in a complete vehicle manufacturing facility outside Europe. It is expected to combine Magna’s vehicle engineering and manufacturing expertise with BAIC’s local manufacturing, marketing and distribution footprint to support electric mobility in China. The new facility has the capacity to produce up to 180,000 vehicles per year.
“Magna has proven experience building complete vehicles for customers,” stated Günther Apfalter, President of Magna Europe and Magna Steyr. “We are excited to work with BAIC to further strengthen Magna’s e-mobility capability in the largest global market for new energy vehicles.”
Zhang Xiyong, General Manager of BAIC Group, commented, “BAIC’s long-term strategy, an open and sharing philosophy, and a collaborative and innovative mindset leads us toward the top partners like Magna.”
The first production of electric vehicles, BJEV’s ARCFOX models, is expected to launch in late 2020. The joint venture will also reportedly be capable of offering EV contract manufacturing services to other potential customers.