Magna Forms E-Powertrain Joint Venture in China

• Deal signed with Huayu Automotive Systems Co., Ltd.
• JV to support Magna's first e-drive business in China
• Builds on Magna's electrified powertrain experience

SHANGHAI, China, Oct. 18, 2017 /CNW/ - To expand its global electrified powertrain offerings and strengthen its local footprint in China, Magna has entered into a joint-venture agreement with Huayu Automotive Systems Co., Ltd. (HASCO,600741.SH), a subsidiary of SAIC Motor. The JV will initially produce an electric-drive powertrain system for a German automaker. A signing ceremony was held today with executives from both JV partners.

Magna designs and manufactures a portfolio of versatile and innovative products that bring power to the wheels of passenger cars and light trucks.

For the initial customer order, the JV will leverage Magna's innovative, highly integrated e-drive system with a focus on the production of the system mainly for the Chinese market. Both partners will give the JV full support to develop localized core competencies in terms of market development, R&D, advanced manufacturing and key parts supply such as gearboxes, inverter components and e-motors, which are key to delivering advanced powertrain technologies and a stronger product portfolio to customers.

"The new-energy vehicle (NEV) market will continue to grow at a rapid speed in China. With this trend, SAIC Motor is developing the New Four Modernization strategy focusing on car electrification, connectivity, intelligence, and sharing economy," Mr. Chen Zhixin, President of SAIC Motor and Vice Chairman of HASCO, said. "The establishment of the JV, a strong combination of HASCO and Magna's strength to initiate cooperation in NEV electrified powertrain systems, has been a milestone for HASCO to develop its core competencies in the field of key new-energy-related components, as well as a critical measure to strengthen the New Four Modernization strategy for SAIC."

"China is the number-one growth market in the world, and they have been clear about their intended leadership in bringing hybrid and electric vehicles to market," said Don Walker, Magna CEO. "Combining strengths with HASCO helps position Magna and the joint venture for future growth and success."

Magna possesses the skills and experience to develop and manufacture electrified powertrains. This includes all key components for modern e-drive systems: e-motor, gearbox, inverter and control software. For nearly 10 years, Magna has been supporting customers in the U.S. and Europe from concept to production with products for battery electric and plug-in hybrid vehicles.

In 2009, the company announced a vehicle-development partnership with Ford Motor Company to introduce a zero-emission lithium-ion battery electric vehicle (BEV) ? this became the Ford Focus BEV, which entered the market in 2011 and is still available today. Magna was responsible for providing the electric motor and electronic control module, and also played a key role in the engineering to integrate the electric propulsion system and other new systems into the vehicle architecture.

Additionally since 2012 Magna has supplied Volvo with the electrified rear axle drive system (eRAD) featured on the Volvo V60 and S60 plug-in hybrid models. Magna's eRAD system complements a traditional gas- or diesel-engine front-wheel-drive powertrain with an independent electric powertrain to power the rear wheels. This system offers multiple hybrid driving modes while also adding four-wheel-drive capability. Magna received the Volvo Cars Quality Excellence (VQE) Award earlier this year for its outstanding performance in supplying these systems.

TAGS
e-powertrain, electric vehicle, Chinese joint venture

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We are a leading global automotive supplier with 327 manufacturing operations and 100 product development, engineering and sales centres in 29 countries. We have over 161,000 employees focused on delivering superior value to our customers through innovative products and processes, and world class manufacturing. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, vision, closure and roof systems. We also have electronic and software capabilities across many of these areas. Our common shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA). For further information about Magna, visit our website at www.magna.com.

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