Johnson Controls and Yangfeng Automotive Trim Systems have signed an agreement to create what will be called Yangfeng Automotive Interiors (YAI). The new company will focus on manufacturing interiors, seating and batteries.
The agreement seems to be a match made in heaven for the two companies, and was signed in May 2014. YAI is expected to begin operations in July 2015 with headquarters in Shanghai.
The Strategy
Yangfeng is one of the largest automotive component suppliers in China and is in control of 70 percent of the shares of YAI.
Johnson claims to be serving customers in over 150 countries, with over 170,000 employees. Why are they not taking an equal slice of the pie?
"Combining our global interiors businesses enhances our ability to serve our automotive customers throughout the world," said Alex Molinaroli, Johnson Controls chairman and chief executive officer. "This will result in an automotive interiors company with unmatched scale, capabilities and reach."
The company seems to be using this as an opportunity to strengthen their image in the Chinese market, continuing their trend of expansion. Johnson is currently constructing a global headquarters in Shanghai. The facility is expected to be operational by 2017.
This big move may be only one in a much larger chess game.
What’s next for Johnson Controls? Check out their webpage for more information.