Pierburg GmbH, Neuss, Germany, which belongs to Rheinmetall Automotive AG, has signed an agreement with Zhejiang Yinlun Machinery Co., Ltd., Tiantai, China, to form a joint venture for the production of modules for cooled exhaust-gas recirculation. The modules are destined for the Chinese market.
Pierburg will hold a 51-percent stake in the newly established company Pierburg Yinlun Emission Technology Co., Ltd. headquartered in the Shanghai region. Yinlun is a well-recognized Chinese supplier specializing in heat exchangers, e.g. for motor vehicles and construction equipment, as well as die-castings and components for emission reduction.
The production base will be a new building about to be completed at the Yinlun location in the southeast of the Chinese metropolis. This is where Yinlun is currently consolidating its own manufacture of technically sophisticated products including besides exhaust-gas recirculation cooler modules, components for thermal management of electric vehicles, charge-air coolers, and equipment for the aftertreatment of emissions.
With a view to exclusively local sourcing, the joint venture will be supplied with exhaust-gas recirculation valves assembled by the existing Pierburg plant in Kunshan and cooler manufactured by Yinlun. Backed by its own development and testing capacities, Pierburg Yinlun Emission Technology Co., Ltd. offers verified, ready-to-install systems, thus shouldering a share of the OEM's manufacturing work. With its local presence and supply base, the company is also able to respond very quickly to changing customer requirements.
Starting production in 2018, the joint venture will initially operate one production line and the necessary testing facilities. Other production lines will be set up in the period 2018 to 2020. Following the ramp-up phase, the joint venture, which is under the management of Pierburg, will probably reach its target workforce of a good 100 by 2020/21.
The joint venture allows Pierburg, global leader in exhaust-gas recirculation systems, to broaden its presence in the world's biggest auto market. Especially on the basis of the growing use of such systems for reducing fuel consumption of gasoline engines, the global demand particularly for cooled systems is expected to surge from annually 17 million in 2015 to about 25 million in 2020. An ever-increasing share of this generally rising production volume will go into the Chinese market.