In a Bid to Vertically Integrate Its global seating business,Corp. acquires a 75% stake in the automotive fabric business of New Trend Group Co. Ltd., a privately held Chinese company founded in 1986.
Terms of the deal were not disclosed. The acquisition allows, a leading global seat producer, to manufacture its own fabric, rather than relying on a handful of fabric suppliers, such as Milliken & Co., Aunde Group, BMD Textiles Ltd. and Guilford Mills Inc.
Because of the sheer volume of fabric it needs, Lear says it will continue purchasing fabric from multiple sources, including these competitors, setting up an interesting new market dynamic.
Another twist will have Lear, as New Trend's majority owner, selling fabric to rivals such as Johnson Controls Inc. New Trend will give Lear an important low-cost source of fabric in the world's fastest-growing automotive market.
New Trend operates two plants — one in Zhejiang and the other in Shanghai. Both export fabric to the U.S. and Europe. New Trend employs 356 people.