German automotive supplier Huf Huelsbeck & Fuerst is planning a joint venture with Chinese vehicle components maker Shanghai Baolong Automotive Corp. for the development and production of tire pressure monitoring systems.
The parties expect to sign the official contract in September and the new company, majority-owned (55 percent) by Baolong, will launch in January, the companies said.
The companies said the aim of the venture is to accelerate growth through joint activities in development, purchasing, production and sales in order to achieve a leading market position.
The venture will combine Shanghai-based Baolong's existing TPMS unit with 400 employees in Shanghai and Wuhan with Huf's 200-plus employees in Germany, the U.S. and China, covering both original equipment and independent aftermarket divisions.Huf's TPMS products are sold under the IntelliSens brand.
"With Baolong we have the ideal partner because our markets complement each other perfectly," Lars Placke, senior vice president of Huf Group and co-chair of the joint venture, said. "[This] will bring us even closer to our customers."
The other co-chair and Baolong 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 sales of $311 million, including $72 million in TPMS-related revenue, up 65 percent over 2016.
The company expects its TPMS unit, with 25-percent 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.
In the U.S., Baolong is a shareholder in Dill Air Controls Products, a major distributor of TPMS and TPMS components.
Velbert-based Huf develops and produces mechanical and electronic key systems, lock sets, steering locks, remote control systems, telematic and TPMS for the automotive industry. It's been in TPMS for the past 20-plus years.
Its business in North America is handled by Milwaukee-based Huf North America Automotive Parts Manufacturing Corp. Huf's principal product in North America is the IntelliSens Universal Sensor, which is designed to replace the majority of OE sensors.
