Sharing costs and risks

Extract A Selected history of Maxion Wheels Maxion Wheels, based in Brazil, was started in 1908 and is now the world's largest wheel manufacturer. It has grown through a series of takeovers including Hayes Lemmerz and Fumagalli, both major manufacturers of wheels and automotive components. Since designing the first wooden-spoke wheels for the Model T Ford car, Maxion Wheels has been responsible for nearly every major wheel innovation in automotive history. Over the course of the last 100 years, it has grown to supply vehicle manufacturers with a wide range of products.

Extract B Maxion Wheels Opens New Aluminium Wheel Plant in Brazil In 2016, Maxion Wheels opened a new light vehicle aluminium wheel plant in Limeira, Brazil. The new plant, next to the company's existing steel wheel plant, will create an additional 500 new jobs by 2020. Brazilian motorists are following the global trend for more sophisticated and stylish vehicles. This includes a growing demand for aluminium wheels on new cars and the new factory will enable Maxion Wheels to meet this increasing consumer demand. The new Maxion Wheels Limeira aluminium plant will open in two phases. In the first phase, production will reach 800,000 wheels per year. Phase two will complete the project, bringing production to two million wheels per year by 2020.

Extract C Selected financial data for Maxion Wheels - third quarter 2021 (Brazilian Reals)

Extract D Dongfeng and Maxion Wheels form joint venture In 2019, Maxion Wheels announced an agreement to form a new joint venture with Dongfeng, one of China's largest automotive parts companies. The new joint venture will build a plant in Hubei Province, China, with a capacity to produce 2,000,000 wheels a year. Construction of the plant started in 2020. The joint venture operation is expected to initially bring more than 450 new jobs to the region. It will produce low pressure die cast aluminium wheels, including high-end wheel finishes, as well as other innovative wheel features.

Extract E Extracts from Maxion Wheels' Code of Conduct - suppliers - Maxion Wheels requires ethics, integrity and transparency in its supply chain and its relationship with suppliers - Maxion Wheels' employees, directors and officers must act ethically when selecting, contracting and maintaining suppliers - Maxion Wheels' suppliers must not allow child labour or any type of slave or forced labour or compulsory labour - The relationship between Maxion Wheels and its suppliers must be formalised by means of the proper documentation, containing specific details regarding each suppliers' obligation to comply with this Code - Maxion Wheels is committed to sourcing the materials used in the manufacture of its products in a manner that does not support, contribute to, aid or facilitate armed conflicts or human rights violations.

Discuss the likely benefits to Maxion Wheels of a joint venture with Dongfeng.