SOUTHFIELD, Mich., June 13 /PRNewswire-FirstCall/ -- Lear Corporation today announced that it has entered into agreements to acquire a 75% share of the automotive fabric business of New Trend Group Co., Ltd. (New Trend Group), a privately held company founded in 1986 which produces automotive interior fabric and commercial plastic goods. Financial terms of the agreement were not disclosed.
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The acquisition of a majority stake in New Trend Group's automotive fabric business is consistent with Lear's strategy to selectively increase the level of vertical integration for its Seating business. New Trend's seat trim fabric operations provide Lear an opportunity for low-cost fabric supply to its existing cut and sew capabilities as well as offering the potential for incremental sales growth as a fabric supplier to a broad range of automotive manufacturers. Other partnerships in the area of seat trim are presently being evaluated by Lear.
"Following our successful launch of the Aventino(TM) Collection of premium leather last fall, Lear was looking for additional opportunities to further vertically integrate seat trim into our core product portfolio," said Lou Salvatore, Lear Senior Vice President and President of Global Seating Operations. "The production of additional trim options such as flat-woven materials and knits provides Lear the opportunity to offer our customers a wider range of seat trim options and improve overall seating system value."
New Trend is a leading supplier of trim to the China automotive market as well as an exporter to Europe and the U.S. through its two automotive textile manufacturing facilities in China. The company produces fabric used for seat covers, vehicle headliners and automotive door panels and carpet for GM, VW, Ford, China Brilliance, Toyota, Nissan, Hyundai, Chery and Geely vehicles, predominantly in China.
Although Lear's investment gives it a majority ownership stake and management control in the New Trend automotive fabric business, the current management and employees will remain in place to ensure operational continuity, manufacturing expertise and existing design/development activities. Lear will maintain the New Trend(TM) brand identity, and we will refer to the business as New Trend(TM) automotive fabric by Lear.
Lear's seat system design, engineering and manufacturing expertise and global scale strongly complements New Trend's experience in automotive fabrics and footprint in Asia. In the initial phase following acquisition, New Trend will continue to focus on its core competencies and produce fabrics in China for internal consumption. At the same time, Lear will evaluate opportunities to expand New Trend's facilities and leverage this low-cost source for export to markets outside of Asia.
"We anticipate growing New Trend's fabric sales multifold over the next couple years," Salvatore continued. "Our consumer research shows European and Asian suppliers are trending toward more flat wovens, while North America has a high usage of knits. As a result, we see an opportunity to increase our market share in Asia, and further down the road, successfully launch our fabric portfolio with North American and European customers."
Lear Corporation is one of the world's largest suppliers of automotive seating systems, electrical distribution systems and related electronic products. The Company's world-class products are designed, engineered and manufactured by a diverse team of 91,000 employees at 215 facilities in 35 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Further information about Lear is available on the Internet at http://www.lear.com/ .
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