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Jebsen boosts stake in Dalian car-parts venture

Porsche

Hong Kong trading firm Jebsen Group is boosting its investment in a Dalian-based car-parts joint venture by 54 million yuan (HK$61.7 million) to meet booming demand for components in the world's biggest car market.

The new funds bring total investment in privately held Jebsen's partnership with Germany's Mitec Automotive, which manufactures car balancer systems, to more than 120 million yuan.

Car balance shafts help cars ride more smoothly and are most common in inline four-cylinder engines.

The investment also signals the growing importance of China's vehicle market to Jebsen, a Danish-owned trading firm established in Hong Kong 115 years ago that generates a large portion of its sales from seven Porsche dealerships it operates on the mainland, Hong Kong and Macau. At the same time, Jebsen's traditional focus on acting as the Hong Kong and mainland distribution agent for foreign industrial and consumer products is shifting as it begins to invest more directly in businesses like the car-parts venture.

The component firm, Mitec-Jebsen, plans by next year to double annual production of car balancer shafts to 600,000 units.

The venture was set up in 2007 and acts as a supplier mainly to the mainland manufacturing operations of higher-end car brands. Jebsen does not regularly report financial results but announced last month it would book around HK$9.4 billion in revenue this year, up from HK$4.2 billion in 2005.

Its Porsche dealerships sold around 3,300 of the luxury sports cars in greater China last year, about one-third of the German carmaker's total. Porsche sales on the mainland consist mainly of the Cayenne SUV.

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