Johnson to Build New Plant in China - Analyst Blog
07 October 2011 - 2:25AM
Zacks
Johnson Controls Inc. (JCI) plans to build an
automotive battery plant in China by investing $100
million.
It will
produce start-stop batteries and cater to global and local
automakers in Asia. It is expected to begin production in early
2013.
The
Start-Stop system is an emerging technology that saves power/fuel
in battery/gasoline powered vehicles. The Start-Stop technology
automatically shuts down and restarts the internal combustion
engine when the driver engages the clutch or releases the brake
pedal to reduce the amount of time the engine spends idling,
thereby improving fuel economy and reducing emissions. In
gasoline-powered vehicles, it can reduce emissions by
5%–12%.
Johnson
Controls is the leading supplier of Start-Stop batteries in Europe
through its VARTA brand. It believes the market for Start-Stop
batteries will grow to 35 million units by 2015, with the U.S.
being the principal market.
The company
plans to produce 2.4 million start-stop batteries annually by 2015
for local and global automakers. It is investing a total of $520
million worldwide over the next four years in additional production
capacity for start-stop batteries. The total investment includes
$280 million in Germany, $140 million in the U.S., and $100 million
in China.
Recently,
Johnson Controls invested $138.5 million to convert its battery
plant near Toledo, Ohio into an Absorbent Glass Mat (AGM) battery
facility. The AGM battery facility, the first in the U.S., will
help the company manufacture Start-Stop and other batteries for
high efficiency vehicles.
The upgraded
Toledo battery plant will expand the existing capacity of AGM
batteries by 6 million units in North America. It will become
operational in spring 2012.
Johnson
Controls Inc. is a supplier of automotive interiors, batteries, and
other control equipment. In the most recent reportable quarter, the
company has completed 18 major launches for
Ford
Motor Co. (F), Kia, Volkswagen,
Tata
Motors (TTM),
Daimler
AG (DDAIF) and
Honda
Motor Co. (HMC)
The Zacks #3
Rank (Hold) company posted a modest 4% increase in profit to $383
million (excluding non-recurring items) in the third quarter of its
fiscal year ended June 30, 2011 from $367 million (excluding
non-recurring items) in the same quarter of fiscal 2010. On per
share basis, profits rose to 56 cents from 54 cents, beating the
Zacks Consensus Estimate by 3 cents.
The increase
in profit was attributable to a double-digit increase in sales in
all the company’s business segments, which was partially offset by
disruptions in automotive production resulting from the earthquake
and tsunami in Japan in March 2011.
DAIMLER AG (DDAIF): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
JOHNSON CONTROL (JCI): Free Stock Analysis Report
TATA MOTORS-ADR (TTM): Free Stock Analysis Report
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