BEIJING: Geely Auto Holding Group Ltd’s subsidiary, Geely Luo You Engine Company Ltd, today announced a joint venture (JV) with Japan-based Aisin AW Company Ltd for the production of six-speed gearboxes, with the initial plan to produce 400,000 units per year.
The JV also covered the production of parts as well as sales, Geely said in a statement released here today on the sidelines of the 2018 Beijing International Automotive Exhibition (Auto China 2018), which runs from April 25 to May 4.
Under the agreement framework, the venture will have a registered capital of US$117 million (RM458 million), with Aisin having a 60% stake by injecting US$70 million while Geely Luo You taking the remaining 40% by investing US$46.80 million.
Aisin, established in 1969, has grown to secure a substantial share in the global market for automatic gearboxes.
Geely said with the launch of its two core strategies — 20200 Strategy and Blue Geely Initiative — the group had a greater demand for high-end automatic gearboxes that offered upwards of six gears and Geely’s own capacity for gearbox production was not able to keep up with demand.
“The establishment of this new JV will allow Geely to introduce new products that fit with the consumers’ demands for superior driving and comfort as well as fuel efficiency.
“By creating a new JV, Geely is able to take part in the management of the operations and lower purchasing costs and raise efficiency,” it added.
Geely Auto Group president and CEO An Conghui commented: “By establishing this new JV with Aisin, we will be able to raise Geely’s core competencies in powertrain development and production, and accelerate our 20200 Strategy and Blue Geely Initiative.
“From today, both parties will be able to work together on technology development and application to create a long-term strategic partnership.”
Geely Auto Group is a leading automobile manufacturer based in Hangzhou, China, and was founded in 1997 as a subsidiary of Zhejiang Geely Holding Group. It sells vehicles under the Geely Auto brand.