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In Asian Auto Parts Joint Venture, Germany's Rheinmetall Bolsters China Operations, Ambitions

Hasco Huayu Shangai Party Meeting July 2014 Source Hasco Huayu Automotive
Employees at Hasco Huayu Automotive, a Shanghai-based joint venture partner with Germany's Rheinmetall, hear the 18th Congress of China's Communist Party report in 2013.
  • Why it matters

    Why it matters

    The Düsseldorf metal products maker is teaming up to expand its production capacity in China through a new joint venture with a Chinese automaker.

  • Facts

    Facts

    • Rheinmetall’s KS Aluminium-Technologie and Hasco Huayu Automotive will collaborate on the building of lightweight automobile engine parts.
    • The Chinese automotive sector is growing exponentially and will soon surpass Europe and North America in vehicle sales.
    • The deal frees up more capital for Rheinmetall’s armaments business.
  • Audio

    Audio

  • Pdf

When Rheinmetall AG chief executive officer Armin Papperger talks tanks and cannons, his audience hangs on his every word. If he discusses the automotive sector of his company, eyes glaze over and interest dwindles.

Düsseldorf-based Rheinmetall is certainly in the business of armaments, but it earns most of its money as a supplier of automotive parts to Volkswagen, Daimler and BMW. Mr. Papperger is determined to further expand operations in the lucrative and fast-growing Chinese market through another joint venture with Huayu Automotive Systems Co. Ltd. (HASCO) in Shanghai.

Rheinmetall’s KS Aluminium-Technologie in Neckarsulm, which designs and manufactures lightweight aluminum crankcases ranging from simple four-cylinder engines for compact cars to complex 12-cylinder engines designed for limousines, employs 1,000 and has annual sales of about €200 million. Hasco, a division of Shanghai Motor Corp. Ltd., will provide the cash to finance the expansion. Ownership will be split evenly between the two companies, according to Rheinmetall.

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