(Yicai) May 22 -- Jingu said the Chinese steel wheels manufacturer has secured a 10-year contract to supply low-carbon wheels to a leading global automaker’s factories in the United States in a deal expected to generate revenue of USD158 million over the first five years.

Under the deal, Jingu will supply the wheels for a new passenger vehicle model, with mass production set to begin in the second half of next year, the Zhejiang province-based firm announced yesterday, without giving the client's name due to a non-disclosure agreement.

This is the second original equipment manufacturer contract Jingu has received from the buyer's US plants. Jingu and its Avatar low-carbon steel wheels have already become part of the customer's global supply chain, including its joint venture facilities in China, the firm said.

According to Jingu’s last annual report, the company is a global tier-one supplier for General Motors, Ford Motor, and Volkswagen, all of which operate JV plants in China. 

Avatar wheels weigh the same as aluminum alloy wheels but are five to six times stronger and more cost-effective. Their durability and lower carbon footprint have helped automakers cut costs and decarbonize supply chains, leading to increasing demand both domestically and internationally, per the annual report.

This is also the second major contract that Jingu has landed this week. On May 19, the firm said it had received notice from a global electric vehicle maker to supply its flagship sedan. The unidentified carmaker awarded Jingu a similar contract in December for the flagship SUV in its lineup. Jingu noted that both models have been among the best-selling EVs in China over the past year.

Jingu [SHE: 002488] closed 3.6 percent lower at CNY14.12 (USD1.96) a share today. The broader Shenzhen stock market gave up 0.7 percent.

Editor: Emmi Laine