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BAIC unit, Canada's Magna form ventures to make EVs
Reuters | 2018/6/19

Canadian auto parts supplier Magna International Inc. said on Monday it would set up two joint ventures with Beijing Electric Vehicle Co. to build electric vehicles in China.

The JVs are expected to take over an existing manufacturing site in Zhenjiang, Jiangsu, owned by BAIC Group, the parent of Beijing Electric Vehicle Co.

The first production vehicles are planned for 2020, the companies said.

Magna and Beijing Electric said they will also make cars for other customers at the plant.

The project marks the first time North America¡¯s largest automotive supplier is expanding vehicle manufacturing operations beyond its 20-year-old Steyr venture.

China surpassed the U.S. in 2015 as the largest market for EVs, helped by government subsidies and stringent emissions rules. The local plant in China helps Magna enter the fast-growing market while potentially helping it to lessen the impact of any increases in export costs resulting from the intensifying trade spat between the U.S. and China.

The Zhenjiang plant has capacity to build 180,000 vehicles a year and it will also offer engineering and complete vehicle manufacturing services to other customers. 
Magna¡¯s Steyr facility in Graz, Austria, operates similarly by offering contract manufacturing for automakers including BMW AG and Jaguar Land Rover.

Tie-ups with local companies are common in China, with automakers from Volkswagen AG to Ford Motor Co. forming alliances to build and sell EVs. Production is limited by government permits.

The deal is also a boon for BJEV, which is planning to list on a mainland stock exchange. The stock is set to start trading in about two months, Xu Heyi, chairman of its parent, said in early June.

Both Magna joint ventures are subject to conditions including final agreements and regulatory approval.

Bloomberg contributed to this report.

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