Brose Group and Volkswagen inked a joint venture to develop and manufacture seats, seat structures and components along with vehicle interior solutions. Brose will acquire half of Volkswagen subsidiary SITECH and each company will hold 50 percent stake in the JV. The transaction is still awaiting approval from antitrust law and other standard closing conditions and is expected to complete by year-end.
The joint venture aims to capture a significant share of business from OEMs that are not part of the Volkswagen Group and plans to expand its business with the Volkswagen Group. SITECH anticipates sales of around 1.4 billion euro (Rs 11573.8 crore) during the current fiscal year, generated by a workforce that is over 5,200 strong. The joint venture is expected to double business volume to 2.8 billion euro (Rs 23147.6 crore) by 2030.
Brose will take over the industrial leadership and consolidate the joint venture for accounting purposes. Volkswagen will appoint the Chief Financial Officer and will also be responsible for production. In addition to existing development and production sites in Eastern Europe, Germany and China, plans are underway to expand activities in Europe, America and Asia. Both companies will be represented equally on the board, with Brose providing the Chief Executive Officer and the Chief Technology Officer.
Brose and SITECH are bundling their expertise in the new company and preparing for future developments in the market for vehicle seats and interior solutions. The vehicle interior is developing into a mobile living space that blends conventional demands on comfort and safety with new, flexible and personalised design options. Over the long term, the joint venture is expected to establish a firm foothold as one of the industry’s top 3 players.