LUMMEN, Belgium -- Bosal International and Delphi Corp. will announce a joint venture today, May 2, that creates an exhaust system supplier with a global reach.
The partners have formed a nonequity joint venture so they can use each other's factories and combine their specialties: Bosal in exhaust systems and Delphi in catalytic converters and diesel particulate filters.
"Bosal Delphi will be able to offer complete exhaust systems to OEMs," Karel Bos Jr., Bosal's CEO, said at the company headquarters here.
The combined revenue of the new venture is expected to be about $890 million.
"We already have won one joint contract," said John Fuerst, Delphi business line executive for exhaust emissions systems. He declined to identify the automaker.
Bosal's aftermarket exhaust system operations are not included in the venture.
Aftermarket sales provided $271.6 million of Bosal's $672.6 million revenue from exhaust systems last year.
"We may eventually benefit from this venture by including Delphi catalytic converters in our aftermarket portfolio," Bos said.
But the partners expect the biggest advantages will come from combining engineering and manufacturing operations and helping each other enter new markets.
With worldwide sales of more than $24 billion last year, Delphi is the biggest supplier in the United States and No. 2 in the world to Germany's Robert Bosch GmbH.
"We are stronger in the U.S. and Bosal is stronger in Europe, so we can jointly use our facilities and grow without the need for greenfield investments," Fuerst said.
Bos added: "We won't have entry cost in new markets because we can join the already-existing infrastructures of our partner and leverage each other's experience."
Bosal Delphi expects booming demand for diesel particulate filters.
"We are preparing for rapid mid-term growth, maybe even long-term growth when new U.S. diesel emissions rules take effect," Fuerst said. "This joint venture makes us a global supplier of complete exhaust systems."