Aichi Steel, part of Toyota, turns Chinese magnet-processing unit into subsidiary in bid for market share
TOKYO, NNA - Toyota Group affiliate Aichi Steel Corp. aims to penetrate the Chinese electric vehicle market by turning its local magnet processing unit into a subsidiary and increasing its production capacity.
Aichi Steel has bought enough shares of the unit to gain a majority stake, a company spokesman said Friday. It acquired the shares in Zhejiang Aichi Mechanical & Electrical Co. through private share placement, the spokesman said.
Following the deal, Zhejiang Aichi’s capital reached to 41.5 million yuan ($5.93 million), the company said in a statement Tuesday. Zhejiang Aichi will boost its monthly production capacity by about 14 percent to 1.6 million units of magnetic parts for motors used for cars and electronic tools among other items, according to the statement.
Aichi Steel acquired a 33.3 percent stake in Zhejiang Aichi in 2018 to stabilize supplies of proprietary magnets to reprocess for Chinese customers and become more prominent in the market. Aichi Steel commissions Zhejiang Aichi to process magnetic powder for the magnets.
Aichi Steel increased its stake to 48.6 percent last year to boost production capacity. The deal this month gives Aichi Steel a 56.6 percent stake in Zhejiang Aichi. The rest belongs to Pinghu Geor Chi Electronics Co., and affiliate of Taiwan-based Geor Chi Development Group, the statement said.
Aichi Steel sees potential growth in the local market for electric vehicle motors, according to its statement.
Zhejiang Aichi, established in 2016, supplies various types of parts for motors for automotive seats and sliding roofs for Chinese cars as well as electric power tools.