Johnson Controls Inc.’s (JCI Quick QuoteJCI - Free Report) shares gained 0.6% on Jun 9 after the company reported plans to form a joint venture with Binzhou Bohai Piston Co., Ltd., to build a new automotive battery manufacturing plant in China. This will be Johnson Controls’ fourth such plant in the world’s largest automobile market.

The $200 million plant will be located at Binzhou in the Shandong Province. Construction of the facility will start in 2017 and production is expected to commence in 2019.

The plant will manufacture both conventional flooded and absorbent glass mat (AGM) battery technologies, and serve automakers as well as aftermarket customers. Its production capacity is estimated to be around 7.5 million batteries per year.

China is expected to be the world's largest automotive battery market by 2020. Johnson Controls aims to take advantage of this market through the new joint venture. The demand for AGM batteries is anticipated to grow in start-stop vehicles in the nation. Vehicles with start-stop technology are expected to be 50% of the total vehicles sold in China, or nearly 15 million vehicles, by 2020.

Johnson Controls has been focusing on market expansion in China since its foray into the nation in 2005. In Aug 2015, the company announced plans to construct a new automotive battery manufacturing facility in the Tiexi District of Shenyang in northeast China. The $200 million facility will have a production capacity of 6 million automotive batteries a year. The plant is scheduled to start production in 2018. The facility will mainly produce batteries for start-stop vehicles.

Binzhou Bohai is an auto parts affiliate of Beijing Automotive Industry Group Co., Ltd. (BAIC Group). Johnson Controls is a supplier of automotive interiors, batteries and other control equipment..

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Zacks Rank

Currently, Johnson Controls carries a Zacks Rank #3 (Hold).

Some better-ranked automobile stocks include Lear Corp. (LEA Quick QuoteLEA - Free Report) , Oshkosh Corporation (OSK Quick QuoteOSK - Free Report) and Superior Industries International, Inc. (SUP Quick QuoteSUP - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).

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