Valeo has inked a 50:50 transmission joint venture with long-standing South Korean partner, Pyeong Hwa Group, to be known as Valeo-Kapec.
Valeo-Kapec, headquartered in Daegu in South Korea, will work in the torque converter field for automatic and continuous variable transmissions.
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Each partner will contribute to the Joint-Venture, its respective Torque Converter business, located for Valeo at: Nanjing (China), Atsugi (Japan), San Luis Potosi (Mexico), Troy (US) and located for Kapec in: Daegu, Waegwan and Seongju (South Korea).
The new company will employ around 3,000 people and will be controlled and fully consolidated by Valeo. It is estimated the JV will generate around EUR1bn (US$1.07bn) sales on an annual basis and be accretive to Valeo’s operating margin for its first fiscal year.
The agreement is subject to approval by the competent authorities.
“By strengthening our ties with our long-standing South Korean partner and creating this JV, we will double our sales of torque converters for automatic and continuous variable transmissions and become the world leader in this high-technology product line,” said Valeo chairman and CEO, Jacques Aschenbroich.
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By GlobalData“And by stepping up our presence in South Korea and increasing sales to Hyundai-Kia, we expect our sales in Asia to increase by around EUR500m.”
Data from just-auto’s QUBE service shows Valeo’s Transmission Systems group is part of its Powertrain Systems division. Powertrain Systems is a EUR3.8bn business unit within Valeo, which accounted for 26% of sales in 2015. The business is placed number one worldwide for electrical systems related to powertrain and number two for transmission systems.
The business has 36 plants, 15 development centres, six research centres and employs more than 19,000 people. The business unit is organised along four product lines:
Electrical Systems
Transmission Systems
Combustion Engine Systems
Electronics
