Member Article

Gateshead's Sevcon forms Chinese partnership to target Asian growth

Gateshead-based low carbon vehicle manufacturers Sevcon have formed a join venture with a Chinese automotive parts supplier to target the rapidly growing market in Asia.

The Nasdaq-listed firm reported improved sales this week as pre-tax profits were $710,000 in the three months to December 31 compared with a loss of $1.2 million in the corresponding period last year.

The firm has now launched a joint venture with Chinese Tier 1 automotive supplier, Risenbo Technology Co Ltd, based in Hubei Province.

Operating as Sevcon New Energy Technology Company Ltd, the firm will source from Sevcon and will market and sell existing and future Sevcon products for electric and hybrid vehicles.

Sevcon president and CEO Matt Boyle, said: “Partnering with Risenbo is a unique strategic opportunity for Sevcon to gain greater access to the world’s largest electric and hybrid vehicle market.

“China has long been one of our most important growth regions, driven by increasing product demand in our traditional off-road, industrial, construction and mining markets.

“This joint venture will open the door for Sevcon to help China’s Tier 1 automotive suppliers meet the country’s fast-growing demand for zero-emission scooters, motorcycles,automobiles and commercial vehicles, as well as hybrid electric vehicles.

“Working with Risenbo, a respected supplier to the automotive market in China, will enable us to forge new customer relationships in this crucially important geographic market far more rapidly and efficiently than we could on our own.”

The firm endured a difficult trading period in 2012 to early 2013, as annual revenues dropped 10%, but Mr Boyle remained positive about the year ahead thanks to increased product shipments.

He added: “Sevcon’s revenue growth in the first quarter was driven by increased product shipments in the majority of our markets, and in all three of the geographic regions we serve.

“Our sales growth in North America was driven by substantially stronger demand, year-over-year, in our traditional off-road markets, primarily for fork-lift truck and aerial work platform applications.

“Demand also was significantly higher in Japan and China, primarily for off-road applications as well. Although the European economy still faces challenges, this was our second consecutive quarter of growth in that region, largely driven by increased product demand for 4-wheel EV applications in the on-road market.”

This was posted in Bdaily's Members' News section by Tom Keighley .