GEELY Group, a privately owned mainland carmaker, and its Hong Kong partner Guorun Holdings, plan to “multiply” investment in their newly launched joint venture to take advantage of the car boom in China.
The two companies are set to raise investment in the joint venture to 1.5bil yuan (RM687mil) in the next two years from 200mil yuan (RM91mil) now, Geely said in a statement released at the weekend.
Geely, based in East China's Zhejiang Province, has a 53.2% stake in the joint venture set up last week while Guorun , controls the remaining stake of the joint venture, Zhejiang Geely Guorun Automobile Co.
The project will use Geely's existing plant in Ningbo, a port city in the province, to produce the Merrie and Ulion cars.
The launch of the joint venture is Geely's first step to put its operation under the public supervision through co-operation with overseas partners, said Geely chairman Li Shufu.
Geely last year recruited Xu Gang, a former senior taxation official from the Zhejiang provincial government, to be its chief executive officer. Another top recruit is Nan Yang, former president of Shanghai VW, German Volkswagen Group's joint venture.
The company is seeking listings in Shanghai, Hong Kong and New York.
Geely said it was willing to integrate all of its auto operations, including other car manufacturing bases, engine and gearbox plants, sales companies and an auto research institute, into future joint ventures. Geely also has two manufacturing bases in Shanghai and Linhai, a city in Zhejiang.
The company is also building a 300,000-unit manufacturing base in Taizhou.
Geely now has a total production capacity of 200,000 cars a year. “We also hope companies around the world will invest in Geely to improve our operations,” Li said.
All of China's major state-owned carmakers have set up one or more joint ventures with foreign auto giants.
In January, Geely reached agreements with companies from South Korea and Italy to help it develop cars and engines.
Passenger cars made in China increased by 56% year on year to 1.15 million units last year. – China Daily
Did you find this article insightful?