Sona Comstar, units will invest $12m in JV for 60% share

Sona Comstar, units will invest $12m in JV for 60% share

Sona Comstar, a leading global supplier of driveline solutions, has signed a binding term sheet with China’s Jinnaite Machinery Co. (JNT) to establish a joint venture (JV) focused on manufacturing driveline systems for global and Chinese automotive customers [1]. The JV will commence operations in the second half of the current financial year.

Sona Comstar will invest $12 million, while JNT will contribute $8 million in assets and business to the JV in the first phase. Sona Comstar will hold a 60% share in the JV, underscoring its strategic commitment to the Chinese market. The JV aims to capitalize on China's large electric vehicle (EV) market and supply chain.

The joint venture aligns with Sona Comstar’s broader strategy to expand its presence in Asian markets, including India, China, Japan, and South Korea, while also increasing market share in North America and Europe. Vivek Vikram Singh, MD and Group CEO of Sona Comstar, stated, "As the largest electric vehicle market in the world and a leader in EV technologies, China offers tremendous opportunities for innovation and growth. By leveraging the strengths of both partners, this venture is well-positioned for strong growth and has the potential to become a key supplier of driveline solutions for electric vehicles in the region."

Jinnaite Machinery Co., Ltd. (JNT), with its patented technology and strong customer base in the automotive, off-highway, and railway sectors, brings significant expertise to the JV. JNT holds 63 patents and 36 proprietary technologies and is actively involved in the formulation of Chinese national standards, contributing to the development of five national standards.

The JV is expected to commence operations in the second half of the current financial year to fulfill orders from both EV and non-EV automotive customers. With a robust order book already in place, Sona Comstar anticipates strong growth and market penetration in the Chinese EV market.

References:
[1] https://economictimes.indiatimes.com/industry/renewables/sona-comstar-establishes-joint-venture-for-ev-components-manufacturing-in-china/articleshow/122797083.cms