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US auto parts maker to outsource interiors to China

US auto parts supplier Johnson Controls will outsource its manufacturing of interior car parts in a merger with a subsidiary of Chinese automaker SAIC, according to a statement.

NEW YORK: US auto parts supplier Johnson Controls will outsource its manufacturing of interior car parts in a merger with a subsidiary of Chinese automaker SAIC, according to a statement on Sunday.

Johnson Controls said it will have a 30 per cent stake in the shared enterprise, which it claimed would be "the largest automotive interiors company in the world with revenues of approximately US$7.5 billion."

The remaining 70 per cent ownership in the company will be held by a subsidiary of SAIC, Yanfeng Automotive Trim Systems.

The new company will be based in Shanghai and will have development centres and clients in the United States, Europe and Asia. It will produce instrument panels and cockpit systems, door panels and floor consoles.

For several months, Johnson Controls had been examining options for its interior car parts production, which are worth around $4.2 billion a year, a spokesman said.

Johnson Controls chairman and chief executive Alex Molinaroli said in the statement the new venture "is a natural extension of our already very successful existing partnership with Yanfeng in automotive seating."

"It creates a strong combined company with a market leading position and a foundation for sustained global growth, he added.

The deal is expected to be completed in the first half of 2015.

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