China's GEELY automaker BUYS Sweden's VOLVO

HONG KONG — Ford Motor Co. reached an agreement yesterday to sell its Volvo subsidiary to a Chinese conglomerate, in the clearest confirmation yet of China’s global ambitions in the auto industry.

Zhejiang Geely Holding Group, based in Hangzhou, agreed to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.

Ford paid $6 billion in 1999 to acquire Volvo, leaving the company with a substantial loss on its investment. Ford has shifted its strategy to focus on its core brands and has already sold off other luxury brands, including Jaguar and Land Rover to Tata Group of India for $2.3 billion a year ago.

The purchase of one of Europe’s most storied brands shows how China has emerged not just as the largest auto market by number of vehicles sold in the past year, but also as a country determined to capture market share around the globe.

Zhejiang Geely said it planned to retain production of Volvos in Sweden, but it is expected to build another factory for them in China, most likely near Beijing or Shanghai. Ford already builds small numbers of Volvos for the Chinese market in Chongqing. Most of the vehicles built at that factory are Fords and Mazdas for sale in China.

Antonov, Geely sign gearbox production license

Antonov has signed a production license agreement with Zhejiang Geely Automobile Gearbox, the transmission manufacturing subsidiary of Chinese auto maker Geely Automotive.
Under the license, Geely will have the non-exclusive worldwide rights to manufacture and sell transmissions covered by the Antonov 6-speed automatic patents and will also receive design support from Antonov.

Antonov said it will receive license fees totaling E900,000 payable over the next nine months and then a production royalty on each transmission produced.
John Moore, CEO of Antonov, said: "I am very pleased to be able to confirm this license agreement. Geely has a strong track record in developing transmissions and their experience and established infrastructure will allow us to bring our technology to production rapidly. China is a key market for our technology and Geely provides an excellent customer reference site, which will underpin our commercialization strategy in the region."
Geely is one of China's leading automotive companies and produces around 200,000 cars per year. Both companies will be working together to incorporate the TX6 into a number of models with production commencing in 2008.
An Conghui, vice president of Geely, added: "Geely is delighted to have secured the Antonov TX6 license which in turn has strengthened our transmission product range and enabled us to bring to market a vehicle which will incorporate Antonov technology delivering a compact and cost effective solution

China's Geely may make cars in US

SHANGHAI - Chinese car maker Geely is considering whether to make cars in the United States in order to begin selling there as soon as 2008, its chairman said on Thursday.

Li Shufu, chairman and founder of Geely Automobile Holdings Ltd., speaks during an interview in a Geely Automobile factory in a Shanghai suburb September 28, 2006. [Reuters]

Entry into the U.S. market could be achieved in several ways, and production in the United States "is an option" under discussion, Li Shufu, who founded Geely Automobile Holdings Ltd., told Reuters in an interview.

Geely, a fast-growing auto company based in the east Chinese province of Zhejiang, had previously announced a plan to export to the United States.

Establishing a factory there would mark an expansion of its global ambitions and might make it the second Chinese auto firm to build cars in the United States. In July, Nanjing Automobile Group announced plans to assemble vehicles in an Oklahoma plant.

In the U.S. market, Geely will sell self-developed models designed specially for North America, said Li, 43.

He did not give details, but other executives told Reuters that the first models would be priced at roughly $10,000.

Li, in Shanghai to celebrate an expansion of capacity at subsidiary Shanghai Maple Automobile, said good preparations would be essential to a successful U.S. debut. Geely needs to have carefully designed sales and service networks, he said.

China last year became a net vehicle exporter for the first time. It exported 172,800 vehicles, with sales boosted mostly by a relatively young crop of auto makers such as Geely, Chery Automobile and Great Wall Motor.

Li founded the Geely group in 1986 as a maker of refrigerator parts, and it subsequently moved into decorating materials, motorcycles and cars.

Geely aims to export nearly 20,000 cars this year, mostly to developing countries, and exports could double in 2007, Li said. Previously, the company had set an export target for this year of 10,000 cars.

The auto maker plans to more than double its annual production capacity to 650,000 vehicles in two years, from 300,000 planned for the end of 2006.

Geely, which has two manufacturing units in east China, is building plants in the center and northwest of the country, and is considering a proposal to add a production base in the northeast.

Asked if he has ambitions for the European market, Li said: "Sure, we are looking globally." He did not elaborate.

Geely investment

Geely investment
2006-06-03
GEELY Holding Group plans to invest more than 10 billion yuan (US$1.25 billion) in the next three years to build automobile assembly and parts plants in the eastern city of Jinan, capital of Shandong Province, the China Business News reported, citing unidentified officials. About 2 billion yuan of the amount will be used to build a vehicle assembly with an ultimate capacity of 500,000 units, the Shanghai-based newspaper said. Another 2 billion yuan will be used to set up components plants, with the rest spent on other facilities, the report said, without giving details.

Geely LG-1 to Hit Market Soon

(SinoCast Via Thomson Dialog NewsEdge)ZHEJIANG, Mar 22, 2006 (SinoCast via COMTEX) --China's private carmaker, Zhejiang-based Geely will see its new model, Geely LG-1, roll off the production line officially on March 31.The Geely LG-1 has three models, respectively equipped with engines of 1.3L, 1.5L and 1.6L.The model will come into the market during May to June this year.Besides LG-1, Geely will put another new model, Geely FC-1, into production in the middle of next month, which will be the highest-level sedan model for Geely.The arrival of LG-1 and FC-1 will mark the carmaker's entrance into the medium and high-grade sedan segment as well as a turning point for Geely to change its previous product layout focusing only on economical small-sized and mini vehicles.

However, because the target market of LG-1 and FC-1 is close to the position of Maple autos, a brand under Geely's subsidiary Shanghai Maple Automobile, which specializes in high and medium-class automobiles, the two auto brands are supposed to go through a future with more subtle rivalship

http://www.chinacarforums.com

No gear shift in Geely US plan

BEIJING, March. 4 -- Geely Automobile Corp, one of the Chinese private automakers that plans to export to the US market, denied a report that it would postpone its plans due to its failure of a recent emission test in North America.

John Harmer, vice president of Geely USA Inc in charge of business expansion in the US market, said Geely failed to pass the first emission test held by the US Environmental Protection Agency due to engine problems, USA Today reported.

Harmer also said if the carmaker were to buy engines from other engine makers, it would greatly increase its costs, making it difficult to achieve its target to sell its Free Cruiser model below US$10,000 in the United States, according to the report.

"The failure is acceptable as our original plan is to start selling (our cars) in 2008, before which we would conduct a series of tests on both safety and emission," said Qu Wei, project manager of Geely International Corp.

"Through the tests, we would know better the higher US emission standard and improve our standard to bring it fully in compliance with the local regulation."

Qu also mentioned that the firm is currently focusing its capability on more technological improvements of the Free Cruiser model at a research and development center in Linhai City, Zhejiang Province. The company plans to have another crack at the US market soon.

Geely’s car assembly hinges on NAP

Chinese carmaker, Geely Automobile Holdings Ltd’s proposed assembly of cars in Malaysia is still on hold pending the outcome of Malaysia’s national automotive policy (NAP), said executive director Lawrence Ang.

He said Geely had earlier planned to produce its car in Malaysia last year after sealing an agreement with Information Gateway Corporation Sdn Bhd (IGC). However, Geely’s assembly plan had been delayed as it awaited details of NAP.

Speaking to reporters after CIMB’s investors conference “Hong Kong’s China Plays” in Kuala Lumpur on Feb 21, Ang said Geely hopes to make Malaysia its manufacturing hub for the Asean market to enjoy lower tariffs.

IGC currently holds the entire stake in the Kuantan assembly plant and there are no immediate plans to take up any stake. Under the agreement, Geeley would provide the technical support and design to the local partner only.

Ang said the Kuantan assembly plant would be capable of assembling 50,000 cars annually.

Geely is looking at a return on investment in Malaysia of at least 15% to justify any move to expand abroad. If all goes well, Geely plans to assemble the Freedom Cruiser, a compact car, with engine capacity of 1.3 litres and 1.6 litres.

A 1.3-litre is retailed in China at US$6,000 (RM22,320) while a 1.6-litre car costs US$8,000 (RM30,000). Currently 95% of the cars made in China are sold in the domestic market

Jones introduces bill to raise tariff on Chinese-made cars

Sun Journal (New Bern, NC)(KRT) Via Thomson Dialog NewsEdge) Mar. 3--The Chinese government slapped a 28 percent tariff on American-made cars, but the U.S tariff on Chinese-made cars is only 2.5 percent.

The disparity in the tariff prompted Rep. Walter B. Jones, R-3rd District, to introduce a bill in Congress Wednesday aimed at leveling the playing field for domestic auto manufacturers.

The bill, co-sponsored by Rep. Dale Kildee, D-Mich., would prevent imports of passenger cars from China until U.S. and Chinese tariffs are equal.

"China has enough trade advantages already," Jones said Thursday in a press release that cited examples including currency manipulation, intellectual property rights violations, heavy government subsidies, and lower worker pay and environmental standards.

"The tariff disparity just gives China another unfair advantage -- an advantage that threatens the job of every worker in the U.S. auto industry," he said.

Two Chinese manufacturers -- Chery and Geely -- have announced plans to begin exporting low-priced, Chinese-made cars to the United States as soon as next year with plans to eventually sell 250,000 cars annually in this country.

Geely reportedly plans to enter the U.S. market by 2008, and anticipates sales of 100,000 by 2012, and other manufacturers already exporting vehicles from China to Europe and elsewhere may also soon export Chinese-made vehicles to America.

"U.S. auto workers deserve nothing less than the opportunity to compete on a level playing field," Jones said. "This legislation would help give U.S. auto workers a fighting chance."

The legislation does not require U.S. tariffs on passenger cars be raised or Chinese tariffs be lowered, rather it states that until tariff rates are equal, no Chinese-made cars may be imported into America.

China's Geely developing hybrid autos for 2007 launch - report

SHANGHAI (AFX) - Geely Automobile Holding Corp, which makes small cars with internally-developed technology, said it plans to develop more energy-saving cars, including hybrid models, the Shanghai Daily reported citing the company's top executive.

The Hangzhou-based private automaker said it has already conducted research and development into hybrid cars using its own technology, the paper said citing Li Shufu, chairman of Geely.

The first hybrid model is expected to roll off the assembly line early next year and this will kick off mass production at its plant in Xiangtan, Hunan Province in central China, the paper said.

Construction of the Xiangtan plant started at the end of last month and the facility will be able to produce 50,000 units annually initially before expanding to 100,000 units by the end of 2010, the paper said.

It said hybrid cars, which switch between an electric motor and a gas or diesel engine, can save up to 30 pct in fuel compared to standard cars.

Other domestic automakers such as Chery Automobile Corp, Shanghai Maple Automobile Corp and Chang'an Automobile Group have started to make hybrid cars while joint ventures like Shanghai Volkswagen and Shanghai General Motors are also competing to roll out such models, the paper said.