Chinese carmaker in joint venture with US company

By Xinhua

Hefei : Chinese carmaker Chery Automobile has set up a joint venture with Quantum LLC, a US subsidiary of Tel Aviv-listed Israel Corp, in its attempt to explore the European and American markets.


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The joint venture, Chery Quantum Automobile, has been registered at the administration of industry and commerce in east China’s Anhui Province, sources from Chery said.

Quantum LLC spent $225 million for a 45 percent stake in the new entity, while Chery provided mainly technology and land to get a controlling 55 percent. The two parties planned a total investment of $1.5 billion into the joint venture, which would be the biggest joint venture in Anhui.

A Chery official said it is the first time for a Chinese automaker to provide technology, rather than direct financial investments, to form a joint venture with a foreign company.

Chery Quantum Automobile is expected to start production in 2009 and aims to produce 150,000 vehicles a year.

Chery’s vehicle sales are forecast to reach a record 480,000 units this year, after rising 24.8 percent year on year to 381,000 units in 2007. The company remained the country’s fourth largest automobile seller in 2007.

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