Johnson Controls is forming a joint venture with Binzhou Bohai Piston Co. Ltd., an auto parts affiliate of Beijing Automotive Industry Group Co. Ltd. (BAIC Group), to build its fourth Chinese automotive battery manufacturing plant. Aimed at serving both automakers and aftermarket customers, the facility will be located in Binzhou, Shandong Province.

“We understand Chinese market dynamics, consumer demands and both short- and long-term energy storage technology needs,” said Joe Walicki, president, Johnson Controls Power Solutions. “This joint venture is a strategic move to position Johnson Controls and Bohai Piston to take advantage of what will be the world’s largest automotive battery market by 2020.”

At full capacity, the more than $200 million USD plant will employ 650 people who will manufacture both conventional flooded and absorbent glass mat (AGM) battery technologies. AGM powers start-stop systems, which increase vehicle fuel efficiency up to 5 percent, helping automakers meet increasingly strict environmental regulations.

“In the Chinese market, there is strong demand for auto part technologies that can improve fuel efficiency and there will be rapid growth for AGM batteries in start-stop vehicles,” said Han Yonggui, BAIC Group director and chairman of Beijing Hainachuan Automotive Parts Co. Ltd. (BHAP). “The new joint venture will position both companies to take advantage of this market opportunity and we believe our cooperation with Johnson Controls, the global automotive battery leader, will help promote leading products and technologies in China.”

According to Johnson Controls, by 2020, 50 percent, or about 15 million new vehicles, will be equipped with start-stop functionality in China, saving an estimated 1.2 billion liters of gasoline per year. This technology also is estimated to reduce greenhouse gas emissions by 2.8 million metric tons per year.

“With the combination of Johnson Controls leading technologies, large market demand from BAIC Group members and from the aftermarket, as well as favorable investment conditions in Binzhou, we believe the joint venture will be a great success,” said Lin Fenghua, chairman of Binzhou Bohai Piston Co. Ltd.

“Our technology and battery capabilities, combined with the Bohai Piston growth platform and favorable Binzhou location, is a real winning combination,” said Kenneth Yeng, vice president and general manager, Johnson Controls Power Solutions China.

Construction of the state-of-the-art facility is expected to begin in 2017, with production starting two years later. Once up and running, the plant will be able to produce 7.5 million batteries per year.

“Johnson Controls remains committed to serving our customers wherever they are in the world with investments such as this manufacturing plant and joint venture, which brings our leading technologies and global best practices to China,” said Trent Nevill, president, Johnson Controls Asia Pacific.

In 2015, Johnson Controls announced it signed an agreement to build a new battery manufacturing facility in Shenyang, China. It is expected to start operations in 2018. The company also has battery plants in Chongqing and Changxing, and an energy storage research and development center in Shanghai.