Johnson Controls has signed a memorandum of understanding (MOU) with Beijing Hainachuan Automotive Parts Co. Ltd. (BHAP), an auto parts subsidiary of Beijing Automotive Industry Group Co. Ltd. (BAIC Group), to set up automotive battery sales and manufacturing joint ventures in the world’s largest vehicle market.

Under the MOU, Johnson Controls and BHAP will offer a range of batteries to automakers and service networks under BAIC Group, one of China’s largest automobile manufacturers. These batteries can power conventional vehicles as well as those for fuel-efficient Start-Stop systems.

“This MOU positions Johnson Controls and BAIC to take advantage of what will be the world’s largest automotive battery market by 2020,” said Joe Walicki, president, Johnson Controls Power Solutions. “By understanding market dynamics, consumer demands and technology needs, Johnson Controls’ complete portfolio of batteries can best meet customers’ short and long-term energy storage needs.”

“BAIC and Johnson Controls have already established good cooperation in the past,” said Xuejun Li, general manager of BHAP. “We are pleased to partner with Johnson Controls on Start-Stop business, to further explore the potential in the Chinese automotive industry by leveraging the strengths that each company can bring into the partnership, and to better serve BAIC and other related domestic and international original equipment customers.”

Founded in 1958, BAIC Group covers a wide range of businesses from vehicle manufacturing, research and development, auto parts manufacturing, automobile service and trade, to general aviation investment and financing. It has automotive manufacturing joint ventures with Hyundai, Mercedes Benz, and a number of self-owned brands like BAIC Motor, Senova, Changhe Auto and Foton.

Approximately 22 million new vehicles are produced in China every year, making it the world’s largest automotive market. Last month, Johnson Controls announced it signed an investment 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.

Kenneth Yeng, vice president and general manager, Johnson Controls Power Solutions China, added that the company will continue to invest in China for future growth by bringing its best practices to the market.