Contract manufacturer Valmet Automotive is making strategic changes in the face of the prolonged downturn on the European automotive industry and the slower than expected pace of electrification.
It will now expand its operations beyond the automotive sector to areas including defence and will be majority owned by the Finnish state.
These changes will enable strategic expansion in the face of the prolonged downturn on the European automotive industry and the slower than expected progress of the electrification of transport.
The company, which is one of the largest European manufacturers of convertible roof and kinematic systems, will now offer its expertise in areas such as defence.
As part of an ownership and financing arrangement, IONCOR, the company’s subsidiary focused on battery systems, will become a subsidiary of Finnish Minerals Group, a fully state-owned company developing the battery value chain. The Finnish State will become Valmet Automotive’s majority owner, and Pontos Group will continue as a minority owner.
In 2024, Valmet Automotive initiated a strategic review for increasing the independence of its business areas and expanding the contract manufacturing business to new industries. The downturn in the European automotive industry has been prolonged and the electrification of transport has progressed more slowly than expected. The ownership and financing arrangements now carried out will enable Valmet Automotive’s strategic expansion: in the future, the company will offer its decades-long, in-depth expertise in industrial serial production to a variety of industries, including contract manufacturing of defence supplies.
Pasi Rannus, CEO of Valmet Automotive, said: “We are taking a completely new step in Valmet Automotive’s sixty-year history, as we are expanding the company’s business beyond car manufacturing. Our expertise in industrial serial production, unique in Finnish conditions, creates a strong foundation for this expansion. This will add new pillars to our business and, on the other hand, create more domestic production capacity in Finland, for example, for the needs of the defence sector and security of supply. I am particularly pleased that the special expertise in industrial serial production will now remain in Finland,”
The divestment of IONCOR and the investment made by the State are important steps in Valmet Automotive’s strategic change. “IONCOR is one of Europe’s leading independent manufacturers of automotive battery systems, and thus a key player in the clean energy transition. Now, the company becomes an integral part of the Finnish battery value chain and, with new owners, gains even stronger support for developing its operations,” Rannus continues.
As part of a wider ownership and financing arrangement, the Finnish State becomes the majority owner of Valmet Automotive Plc. The State and Pontos Group have acquired a 20.6% shareholding in Valmet Automotive from the Chinese Contemporary Amperex Technology Limited. Following the financing arrangement, the State will own 79% and Pontos Group 21% of Valmet Automotive.
Valmet-automotive.com