China's Wonder Auto And Korean Teawon Form JV

The Jinzhou, Liaoning-based auto components manufacturer Wonder Auto Technology has announced that its subsidiary, Jinzhou Halla Electrical Company, has signed a joint venture agreement with Korean Teawon Dianzhuang Corporation establishing a joint venture to be named Jinzhou Wonder Teawon Dianzhuang Company.

The JV, Wonder Teawon, will be formally incorporated around December 1, 2009, at the West Sea Development Zone Auto Parts Industrial Park of Jinzhou City, Liaoning Province. Wonder Teawon is expected to start operation in June 2010 and its main products will include solenoid switches for automotive starters, alternator collector rings, starter commutators, and other automobile parts. Jinzhou Halla will make a cash contribution of USD2 million in exchange for a 75% equity interest in Wonder Teawon and Teawon Dianzhuang will contribute technology in exchange for a 25% equity interest in Wonder Teawon.

Solenoid switches are a key component of starters, the production of which requires a number of key technologies. Solenoid switches and commutators generally account for more than 25% of the total material cost of a starter.

Teawon Dianzhuang’s main customers include internationally known suppliers of automotive alternators and starters, and its products are exported to the United States, Mexico, India, and Bulgaria, as well as other European and American regions. Teawon Dianzhuang holds a number of patents related to electromagnetic switch products. Teawon Dianzhuang will provide full technical support to Wonder Teawon.

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