Punch Powertrain strengthens the partnership with Stellantis – Companies

Punch Powertrain, the Limburg manufacturer of gearboxes, entered into an agreement with the car group Stellantis (with the brands Citroën, Fiat, Opel and Peugeot) for a new assembly plant. It was to double the annual production capacity to 1.2 million gearboxes.

Until a few years ago, the Punch Powertrain was the Limburg car industry’s showpiece. The company, which makes gearboxes at its factories in Sint-Truiden and China, grew rapidly. But since 2019, the company has been accumulating deficits. 2021 was also a loss year. In addition, the number of employees in Belgium fell from almost 1,100 in 2018 to less than 500 at the end of last year. But besides the negative, there are also positive signs.

The glass is half empty

ONE. Previous success was based on gearboxes for cars with conventional internal combustion engines. That production completely moved to China. This led to restructuring in Sint-Truiden and the relocation of machinery to the Chinese factories. This led to a value reduction of more than 25 million euros on these machines last year.

Thaw. On top of that came the effects of the pandemic. Punch Powertrain customers have postponed or canceled projects due to covid-19. The pandemic put further pressure on margins. It caused a deeper drop in sales, combined with the drop in the number of gearboxes sold.

Three. The impact of the war in Ukraine is not yet fully clear to Punch Powertrain, but the conflict is already manifesting itself in rising commodity and energy prices.

Fire. The owner of the Punch Powertrain is the Chinese Yinyi. It was in bad papers, but now got new shareholders. However, due to the recent new Covid-19 outbreak in China, the legal settlement of the new shareholding was delayed. As a result, Punch Powertrain also has a problem with its financial debt. These amount to 596 million euros, of which 53 million euros are leasing debt. Yinyi is to provide a bank guarantee in the amount of 100 million euros, but that was not yet in order, the board wrote in its annual report for 2021 in mid-June. Punch Powertrain was granted a postponement until the end of September to rectify this. According to a source in the company, “all agreements with the banks are now formally approved and signed”.

The glass is half full

ONE. The company has been working with technology for gearboxes for hybrid and electric cars for several years now. It costs a lot of money: in the last year alone, 64 million euros went to research and development. The department of Sint-Truiden plays a pioneering role in this.

Thaw. Yinyi still believes in his daughter in Limburg. Since 2019, until the end of May this year, Punch Powertrain has received nearly 207 million euros through a subordinated loan from its Chinese shareholder.

Three. Punch Powertrain has a joint venture with the listed car group Stellantis, with brands such as Citroën, Fiat, Opel and Peugeot. Sint-Truiden makes the gearboxes for the hybrid and electric cars in the car group. Production of the latest generation of gearboxes will start in Sint-Truiden at the end of this year. The joint venture also already has a factory in France. And on February 25 this year, a day after the invasion of Ukraine, an agreement was signed on a new assembly plant. It was to double the annual production capacity to 1.2 million gearboxes. According to a source at Punch Powertrain, the agreement on the new plant is still to be formally approved and communicated by Stellantis.

© NBB, TBI

Until a few years ago, the Punch Powertrain was the Limburg car industry’s showpiece. The company, which makes gearboxes at its factories in Sint-Truiden and China, grew rapidly. But since 2019, the company has been accumulating deficits. 2021 was also a loss year. In addition, the number of employees in Belgium fell from almost 1,100 in 2018 to less than 500 at the end of last year. But in addition to the negative ones, there are also positive signals. Previous success was based on gearboxes for cars with conventional internal combustion engines. That production completely moved to China. This led to restructuring in Sint-Truiden and the relocation of machinery to the Chinese factories. This led to a depreciation of more than 25 million euros on these machines last year. On top of that came the effects of the pandemic. Punch Powertrain customers have postponed or canceled projects due to covid-19. The pandemic put further pressure on margins. It caused a deeper drop in sales, combined with the drop in the number of gearboxes sold. Three. The impact of the war in Ukraine is not yet fully clear to Punch Powertrain, but the conflict is already manifesting itself in rising commodity and energy prices. Fire. The owner of the Punch Powertrain is the Chinese Yinyi. It was in bad papers, but now got new shareholders. However, due to the recent new Covid-19 outbreak in China, the legal settlement of the new shareholding was delayed. As a result, Punch Powertrain also has a problem with its financial debt. These amount to 596 million euros, of which 53 million euros are leasing debt. Yinyi is to provide a bank guarantee in the amount of 100 million euros, but that was not yet in order, the board wrote in its annual report for 2021 in mid-June. Punch Powertrain was granted a postponement until the end of September to rectify this. According to a source in the company, “all agreements with the banks are now formally approved and signed.” One. The company has been working with technology for gearboxes for hybrid and electric cars for several years now. It costs a lot of money: in the last year alone, 64 million euros went to research and development. The department of Sint-Truiden plays a pioneering role in this. Thaw. Yinyi still believes in his daughter in Limburg. Since 2019, until the end of May this year, Punch Powertrain has received nearly 207 million euros through a subordinated loan from its Chinese shareholder.Three. Punch Powertrain has a joint venture with the listed car group Stellantis, with brands such as Citroën, Fiat, Opel and Peugeot. Sint-Truiden makes the gearboxes for the hybrid and electric cars in the car group. Production of the latest generation of gearboxes will start in Sint-Truiden at the end of this year. The joint venture also already has a factory in France. And on February 25 this year, a day after the invasion of Ukraine, an agreement was signed on a new assembly plant. It was to double the annual production capacity to 1.2 million gearboxes. According to a source at Punch Powertrain, the agreement for the new plant is still to be formally approved and communicated by Stellantis.

Leave a Comment