Sona Comstar and JNT JV : Auto component major partners with JNT for China manufacturing base, leveraging 63 patents to tap world’s largest EV market. Operations start FY25.
Sona Comstar and JNT JV : $20 Million Partnership with JNT to Strengthen Global Driveline Solutions Footprint
New Delhi/Gurugram: In a strategic move to capitalize on China’s electric vehicle boom Sona BLW Precision Forgings (Sona Comstar) has entered into a binding agreement with Jinnaite Machinery Co (JNT) to establish a China-based joint venture for manufacturing advanced driveline systems. The NSE-listed auto components major will invest $12 million (₹100 crore) for a controlling stake in the JV, while JNT contributes $8 million in assets and IP.
Key JV Details
| Parameter | Specification |
|---|---|
| Total Phase-1 Investment | $20 million |
| Sona Comstar Stake | 60% (via $12M cash) |
| JNT Contribution | $8M in foundry assets + 63 patents |
| Operations Start | H2 FY2025 (by March 2025) |
| Initial Focus | EV driveline components for Chinese OEMs |
Strategic Rationale: Why China Matters
1. Access to World’s Largest EV Market
- China accounts for 60% of global EV sales (8.1M units in 2024)
- Local production avoids 25% import tariffs on auto components
- Direct supply to BYD, NIO, SAIC, Geely and other Chinese EV giants
2. Technology Synergies
✔ JNT’s 36 proprietary casting technologies
✔ 63 patents in complex mold manufacturing
✔ Participation in 5 Chinese national standard formulations
3. Global Supply Chain Integration
- Existing customer overlap in North America, Europe, Japan
- JNT’s railway/off-highway expertise complements Sona’s automotive focus
Management Commentary
Vivek Vikram Singh, MD & Group CEO, Sona Comstar:
“China’s EV market is the innovation epicenter with 40% global market share. This JV combines our driveline expertise with JNT’s advanced foundry capabilities to create a regional powerhouse. With confirmed orders already secured, we’re positioned for rapid scaling.”
Financial & Operational Roadmap
Phase-1 (2024-25)
- Setup in JNT’s existing foundry complex (location undisclosed)
- Initial capacity:Â 500,000 units/year
- Workforce:Â 200+ technical staff
Future Expansion
- Potential $15M Phase-2 investment for dedicated EV component lines
- Target: 15% market share in China’s EV driveline segment by 2027
Market Reaction & Analyst Views
- Stock Impact: Sona Comstar shares up 3.2% in early trade
- Brokerage Take: Jefferies maintains ‘Buy’, cites 30% revenue upside from China foray
- Competitive Landscape:
- Bharat Forge already supplies to Chinese truck OEMs
- Endurance Tech exploring similar JVs in ASEAN
China’s Auto Component Ecosystem Advantage
✔ Localized Rare Earth Supply (Critical for EV motors)
✔ Mature Lithium-Ion Battery Value Chain
✔ Government Mandates: 40% NEV sales target by 2030
Risk Mitigation Strategy
| Challenge | Sona’s Approach |
|---|---|
| Geopolitical Tensions | 60% controlling stake |
| IP Protection | JV structure with clear tech transfer clauses |
| Market Slowdown | Dual focus on EV + traditional automotive |
