Johnson Controls Inc. ( JCI ) has revealed that it will build a third automotive battery plant in China by investing $118 million. The 30,000 square-meter plant, located in Fuling, which is in the central part of Chongqing , will manufacture automotive lead-acid batteries using Power Solutions technologies of Johnson Controls, including the patented PowerFrame grid technology.
The plant will have an annual production capacity of 6 million batteries. The company will perform the groundbreaking for the plant in January 2011 and production is scheduled to begin after a year.
Johnson’s existing two automotive battery plants are located in Shanghai and Changxing. Among these, the automotive battery plant in Changxing is yet to launch production in early 2011 with an annual capacity of 8 million batteries.
Together, these three plants are expected produce more than 18 million automotive batteries annually within three years. In late 2010, the company plans to locate its fourth automotive battery plant in the in the northern region of China , with an annual production capacity of 6 million batteries. By 2015, the company plans to install annual capacity of 30 million batteries in the country.
Johnson Controls’ expansion in China has drawn attention in the first half of the year when it has shown its interest in acquiring bankrupt auto supplier Visteon Corp.’s automotive interiors and electronics business in China.
Earlier, in January this year, the company had approached Visteon for the unit. At the end of May, Johnson has offered $1.25 billion to buy Visteon’s Chinese unit in order to expand its operations in the country.
However, Visteon has rejected its rival Johnson’s bid stating that it was vague and missed necessary details. The former subsidiary of Ford Motor Co. (F) has also accused Johnson’s bid as an attempt to cause a distraction from completing its reorganization in Chapter 11 bankruptcy filing.
Johnson Controls aims to enhance its Automotive Experience business (which produces automotive interior systems for original equipment manufacturers) in China by acquiring the two units of Visteon. The company is especially eyeing Visteon’s booming operations in Shanghai.
Johnson Controls, a Zacks #4 Rank (Sell) stock, has 23 joint ventures and 40 manufacturing facilities in China. The acquisition of Visteon’s units is expected to add another 45 facilities to the company’s operations in the country. Through the acquisition, the company expects to generate $7 billion in revenues from China in 2011, which is more than double the expected revenues of $3 billion in 2010. In 2009, the company has generated revenues of $1.9 billion in China.
FORD MOTOR CO (F): Free Stock Analysis Report
JOHNSON CONTROL (JCI): Free Stock Analysis Report
Zacks Investment Research
