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India’s Bharat Forge to form JV with China’s FAW

Bharat Forge on course to become world’s largest forger by 2007.

Bharat Forge Ltd. (BFL), the world’s second largest manufacturer of automotive forgings, based in Pune, India, has signed a joint venture (JV) agreement with China-based FAW Corp.. The Indian company will hold a 52% stake in the JV, FAW Bharat Forge, which will manufacture highly engineered forged auto components. Company officials did not disclose financial details of the new venture.

“We are following a strategy to achieve global leadership, partly through expansion and partly through acquisitions,” said Baba N. Kalyani, BFL’s chairman and managing director. “We have made acquisitions in Europe and the US, and we will now have a presence in China, which will give us an entry into the world’s third-largest car market.”

The forging subsidiary of the FAW group is the largest in China. Participation in the JV will make BFL the largest forging company in China. FAW has partnerships with Volkswagen AG and Toyota, while Mazda Motor has a JV with FAW Car. FAW also has several JVs for auto components. Its annual vehicle output is more than 1m units.

The joint venture will become operational on April 1, 2006. It will have its manufacturing facility at Changchun in northern China with a total annual forging capacity in excess of 100,000 tonnes. It will manufacture a wide range of forged components for commercial vehicles, passenger cars and light trucks markets in China and globally.

The JV is BFL’s first-ever joint venture with an international forging manufacturer. Previously, it completed acquisitions in Germany, the U.S., and Sweden. Including the JV capacity, BFL will have a total production capacity of over 600,000 tonnes.

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