SPX Corporation announced that its SPX Service Solutions business unit has entered into a framework agreement for a strategic alliance with Launch Tech Company Ltd. of China, a global player in the automotive aftermarket.
SPX has also acquired a minority equity position in Launch Tech.
Founded in 1992, Launch Tech Company Ltd. manufactures and markets a wide range of automotive aftermarket equipment and service solutions for repair centers and currently serves 400 distributors in 60 countries. In 2009, the company reported US$68 million in revenues, with approximately 50 per cent of those sales generated in China, where it is a leading provider of aftermarket diagnostic tools. Launch Tech, in addition to its positions in Europe and North America, also has a leading presence in many other key emerging regions of the world.
Under the framework of the agreement, SPX expects that the parties will evaluate working together to co-market each other’s products and solutions and leverage each of their respective global distribution networks for the benefit of the other and that Launch Tech will also evaluate introducing SPX to its customers and opening up new sales channels for SPX in China, Russia, the Middle East and the broader Asia-Pacific region. In return, SPX will evaluate introducing Launch Tech to its global OEM partners and opening up new sales channels for Launch Tech in the United States. Detailed terms of the strategic alliance will be subject to future definitive agreements to be entered into by the parties.
“Our alliance with Launch Tech is a natural strategic fit that could leverage the respective geographic strengths and tremendous synergies between our two companies, and is designed to drive our mutual growth by enabling both of us to serve our customers on a global scale more effectively,” said David Kowalski, SPX segment president. “As a leading vehicle equipment provider in China and other developing regions, Launch Tech is well positioned to help expand SPX’s presence and elevate SPX brand awareness in the world’s largest, fast-growing auto markets.”
China’s auto sales soared nearly 50 per cent in the first half of 2010 with a total of 9.02 million units sold, according to data from the China Association of Automobile Manufacturers. A total of 13.64 million units were sold in 2009. Rapidly increasing new car sales in China are expected to drive demand for the maturation of the vehicle service industry in China. As such, SPX Service Solutions is taking steps to strategically position its business in order to best serve this market over the long-term.
Kowalski added that “Launch has an impressive track record of establishing its presence and distributing its technically advanced equipment in emerging economies. At the same time, SPX’s deep relationships with global OEMs and broad presence in more than 35 countries could be leveraged to help Launch Tech elevate its visibility in the U.S. and other international markets.”
“We chose to work with SPX Service Solutions because of its nearly 100-year history of vehicle service expertise and broad experience in utilizing the latest, most sophisticated diagnostics tools and technologies,” said Louis Liu, Chairman of Launch Tech Company Ltd. “SPX’s manufacturing, engineering and research and development capabilities here in China, combined with its strong presence in other key global markets makes them the ideal strategic partner to work with in our efforts to drive continued demand for our equipment and solutions among the global automotive aftermarket,” added Charles Liu, CEO of Launch Tech Company Ltd.