Headquartered in Regensburg, Germany, Vitesco Technologies is an automotive supplier of drivetrain and powertrain technologies. It was formerly known as Continental Powertrain, which was founded in 2019 as a spinoff company from German automotive-parts maker Continental. Vitesco Technologies has 40,000 employees and generated revenues of 8 billion euros in 2020.
China is a key market for Vitesco Technologies, which opened its regional headquarters in Shanghai in March 2021. It operates several production, research and development sites across the country with its latest R&D facility in Tianjin established in November 2021.
After its spinoff from Continental Powertrain, Vitesco Technologies became a fully independent entity that had to rebuild its cash management infrastructure from scratch, and it needed to do this within a short period of time as per its transition agreement with Continental Powertrain. In addition, Vitesco had high levels of idle cash in China. Despite strong revenue in the market, China’s strict regulatory requirements governing cross-border movement of funds prevented the organization from seamlessly transferring surplus funds back to its headquarters in Frankfurt. Hence, Vitesco desired a cash management solution that would enable the firm to facilitate the mobility of funds in and out of China seamlessly.
With J.P. Morgan’s help, Vitesco Technologies implemented a comprehensive and complete cash management structure in China that comprises a combination of innovative host-to-host connectivity mechanisms, cross-border sweeping, and unique cash pooling.
Through our banking relationship with J.P. Morgan, we have quickly set up a comprehensive and independent cash management infrastructure, which has allowed us to improve our operational efficiency and concentrate our domestic liquidity in China, while providing our HQ with access to cash for funding as required.
With the solution, close to CNY 2 billion in trapped cash has been mobilized from China via cross-border sweeping since the solution went live in May 2021. Other benefits include:
Corporate spinoffs can often be very challenging, but Vitesco Technologies demonstrated treasury excellence by putting in place an efficient cash management structure within an extremely short period of time to minimize business disruptions. With J.P. Morgan’s solution, Vitesco can seamlessly and efficiently move funds between its domestic entities in China and to its group treasury in Frankfurt, while ensuring efficiencies in the cross-border payments documentation process.
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