Velbert, Germany – German automotive supplier Huf Hülsbeck & Fürst signed a letter of intent in July with Shanghai’s vehicle components maker Baolong Automotive to form a joint venture on tire pressure monitoring systems (TPMS).
The official contract will be signed in September and tnew company, 55/45 owned by Baolong and Huf Group, will be launched in January 2019, said the press release.
It will combine the former’s TPMS unit with 400 employees in Shanghai and Wuhan as well as the latter’s with over 200 employees in Germany, the US and China from both original equipment and independent after market divisions.
“With Baolong we have the ideal partner because our markets complement each other perfectly,” said senior vice president of Huf Group and co-chair of the joint venture Lars Placke. “[This] will bring us even closer to our customers.”
The other co-chair and Baolong’s president Charles Zhang added: “Our clear goal is to be on the list of world's Top three suppliers in this area.”
Set up in 1997, Baolong claims to be a leader in China’s TPMS market and also in North America’s after market segment.
Last year Baolong posted a 24% jump in overall revenue to €266 million (2.1 billion yuan), including €62 million from TPMS, up 65% from 2016.
The company expects its TPMS unit, with 25% gross margin in 2017, to keep on the fast track over the next few years as China’s national passenger car TPMS standards became mandatory this past January, boosting growth of the market leaders with more advanced technology.