Automotive Supplier Behr Forms Joint Venture in China; Presence in the World's Fastest-Growing Auto Market

STUTTGART, Germany--Oct. 3, 20030, 2003--Behr GmbH & Co. KG, one of the world's leading suppliers of automotive air conditioning and engine cooling equipment, and Shanghai Automotive Co., Ltd. (SA) have agreed to set up a joint venture. The new company, Shanghai Behr Thermal Systems Co., Ltd. (SBTS), will begin operations on January 1, 2004, to develop, manufacture and market automotive air conditioning and engine cooling products.

Behr and Shanghai Automotive, a subsidiary of China's leading automotive manufacturing and supplier group, Shanghai Automotive Industry Corporation (SAIC), both have a 50 percent stake in the new joint venture. Potential customers include Chinese automakers as well as the production facilities of European and American car and truck manufacturers in China.

During its start-up phase, Shanghai Behr Thermal Systems will have around 500 employees. In the coming year, production operations will be transferred from Shanghai Automotive's manufacturing plants to the joint venture's facility in Pudong. Total capital expenditure for establishing the joint venture and constructing and expanding the new plant over the next few years will amount to approximately $40 million. The sales revenue target for the first year is $24 million. After a period of five years the joint venture aims to generate sales of around $100 million.

"China is now the fastest-expanding auto market in the world. As a growth-oriented technology leader in automotive air conditioning and engine cooling, we are following our customers to this location, and at the same time completing the establishment of our global network," says Markus Flik, Behr's CEO.

"This partnership with SAIC will give Behr a good starting position in this competitive environment. China's biggest automaker has been one of the country's leading industrial enterprises for many years now and manufactures vehicles in its own right and in cooperation with Volkswagen and General Motors," he said. Behr's new partner is also involved in numerous joint ventures with other major automotive suppliers.

Company details:

Shanghai Automotive Co., Ltd. is one of China's leading auto suppliers. In 2002 the company employed 7,000 people and generated sales of 4.8 billion RMB (around $500 million). Its parent company, Shanghai Automotive Industry Corporation (SAIC), is China's biggest automaker and manufactures vehicles in its own right as well as in cooperation with Volkswagen and General Motors. In 2002 around 610,000 vehicles rolled off its assembly lines, including 410,000 passenger cars. In the past business year, with a workforce of 60,000, the company generated sales of 120 billion RMB (around $13 billion).

Behr GmbH & Co. KG, Stuttgart, is a systems partner for the international automobile industry. A specialist for automotive air conditioning and engine cooling systems, the Behr Group is one of the world's leading manufacturers and suppliers of original equipment for passenger and commercial vehicles. Group sales in the 2002 business year came to around 2.8 billion EUR. Currently Behr employs 16,300 people in 25 worldwide production facilities in Europe, North and South America, South Africa and India.

Further background information on Behr's Asia-Pacific activities, a repro-ready map and photographic material can be found at www.behrgroup.com.