Mid-Cap Automotive Technology Forms Joint Venture with Jinnaite Machinery to Enter Chinese EV Market with USD 12 Million Investment

Sona BLW Precision Forgings Ltd. (Sona Comstar), a prominent global player in mobility technology solutions, announced today the signing of a binding term sheet to form a joint venture (JV) company in China with Jinnaite Machinery Co., Ltd (JNT). This strategic move marks Sona Comstar's entry into the Chinese electric vehicle (EV) market, aiming to manufacture and supply driveline systems and components to automotive OEMs both in China and worldwide.

Sona Comstar plans to invest USD12 million in the initial phase of the JV, securing a 60 per cent equity stake. JNT will contribute USD 8 million in assets and business to the joint venture. The JV is projected to commence operations in the second half of the current financial year (H2 FY26) and already has existing orders from both EV and non-EV customers. This expansion aligns with Sona Comstar's strategy to bolster its presence in fast-growing Asian markets, including India, China, Japan, and South Korea, while also increasing its market share in North America and Europe.

China stands as the world's largest automotive market, particularly for electric vehicles. In 2024, annual EV sales in China reached 11 million units, representing two-thirds of global EV sales. Chinese OEMs held a dominant position, accounting for 76 per cent of global EV sales last year. Furthermore, Chinese EV exports have significantly surged from 1 million in 2020 to over 6 million in 2024, driven by advancements in battery and software technologies, supportive government policies, and substantial investments in EV infrastructure.

Jinnaite Machinery Co., Ltd. (JNT), established in 1997, brings to the JV its expertise in manufacturing complex castings and molds, utilizing patented technology in its world-class foundry. JNT holds 63 patents and 36 proprietary technologies and has contributed to the development of five Chinese national standards. Their strong customer base spans the automotive, off-highway, and railway sectors, including leading Chinese, North American, European, and Japanese automotive OEMs. JNT was recognized as a national-level specialized and innovative "Little Giant" in 2021 and a Green Foundry Enterprise by the National Green Factory Program.

The joint venture will leverage Sona Comstar's proficiency in driveline system design, precision forging, and precision machining, combined with JNT's capabilities in casting and molding. This collaboration, along with JNT's established customer relationships, supplier connections, and understanding of local regulations in China, positions the JV for robust growth. Mr. Vivek Vikram Singh, MD & Group CEO of Sona Comstar, expressed enthusiasm for the partnership, highlighting China's immense opportunities for innovation and growth in the EV market.

On a YTD basis, the stock is down by 18 per cent.

Sona BLW Precision Forgings Ltd. (Sona Comstar) is a global mobility technology solutions provider that designs, manufactures, and supplies driveline systems and components to automotive OEMs, with a significant focus on electric vehicles (EVs). The company is known for its expertise in precision forging, precision machining, and the development of high-power-density EV systems. Sona Comstar is a major supplier of differential assemblies for battery electric vehicles (BEVs) in North America and a key player in Europe, with a growing presence in Asian markets including India, China, Japan, and South Korea. The company's strategic priorities include increasing its EV presence, expanding its global market significance, and diversifying its revenue mix, supported by substantial investments in technology and innovation.

Disclaimer: The article is for informational purposes only and not investment advice.