American automotive parts supplier Johnson Controls has secured a new long-term automotive battery supply contract from the Chinese automotive manufacturer SAIC Motor.
The deal is part of Johnson Controls' plan to expand rapidly in China, which is the company's primary market expansion.
As per the contract, Johnson Controls will supply its Absorbent Glass Mat (AGM) batteries to power SAIC Motor's Start-Stop vehicles.
Johnson Controls Power Solutions China Original Equipment vice president and general manager Luke Lu said as a supplier of automotive batteries, the company is well-positioned to help the Chinese automotive industry grow by offering a spectrum of solutions to meet increasingly strict fuel efficiency regulations.
"Our company's history in this market gives us unique insight into our current and prospective Chinese customers," Lu added.
Johnson Controls has reportedly produced about 20 million AGM batteries since 2007 and is planning to increase production capacity of AGM technology in North America, Europe and China.
The company forecasts that 175 million vehicles across the globe will feature Start-Stop technology by 2020. Currently, over half of new vehicles built in Europe feature Start-Stop technology.
Start-Stop technology turns off a vehicle's engine when the vehicle comes to a stop. When a driver's foot leaves the brake pedal or engages the clutch, the engine turns back on. According to the company, the Start-Stop can provide an estimated 5-8% fuel savings over conventional combustion engines.
