Sevcon announces joint venture in China as earnings improve
British electronic and hybrid vehicle parts maker Sevcon Inc., which has operations in Southborough, on Wednesday announced a joint venture with Chinese automotive supplier Risenbo Technology Co. to market and sell existing and future Sevcon products to automotive suppliers in China.
The agreement has received the required approval from the Chinese government, according to a statement from Sevcon. Each company will own a 50-percent stake in the joint venture, which will be led by a Sevcon executive.
The agreement is expected to become effective in the first quarter of calendar year 2014, Sevcon said.
Sevcon President and CEO Matt Boyle said the agreement is a “unique strategic opportunity” for his company to gain greater access to the Chinese market, which he said is the world’s largest for hybrid and electric vehicles.
“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,” Boyle said in a statement.
The company also released its first-quarter 2014 earnings on Wednesday, which included a 36-percent increase in revenue to $9 million, compared with $6.6 million a year ago, and operating income of $710,000, compared with a loss of $1.2 million in the first quarter of 2013. Net income was $488,000, compared to a net loss of $1.3 million last year.
Sevcon attributed improved earnings to increased product shipments in most of its markets, and across all three of the geographic regions it serves.
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