ZF Friedrichshafen signed a joint venture agreement with Wolong Electric Group Co. under which the Chinese parts supplier will build electric motors and related components for the German supplier’s driveline systems.
Under the agreement signed this week, the partnership, to be incorporated in Shangyu in east China’s Zhejiang Province, is expected to employ up to 2,000 people by 2025. Financial terms were not released.
ZF said it initially awarded the joint venture a major production contract for electric motor components used in hybrid and electric drives, without providing additional details about the contract.
The supplier hopes the new venture, which will initially build electric motors and components for vehicles produced in China, will become a leading electric motor supplier in the global electrified vehicle market.
ZF ranks No. 5 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $36.9 billion in 2018.
Wolong Electric is based in Shangyu and listed in Shanghai. It produces electric motors for automobiles, ships, home appliances as well as equipment used in sectors including mining, oil exploration and chemicals.
In 2018, the company posted 637 million yuan ($91 million) in net profit and 11.1 billion yuan in revenue.