Geely Group, a Chinese privately owned carmaker, expects to sign a joint venture agreement with a Hong Kong company next month, according to a report in the China Daily.

Xu Gang, president of Geely, said Guorun Holding Co, an investment company listed in Hong Kong, will invest 400 to 500 million Hong Kong dollars (US$51.3-64.1 million) in a joint venture with the carmaker based in East China's Zhejiang Province.

Guorun will hold a 40-50 per cent stake of the expected joint venture according to their agreement of intent with Geely, Xu said. Geely will devote its 50,000-unit manufacturing base in Ningbo, a port city in the province, to the joint venture. "The launch of the joint venture will be critical to the cash-starved Geely's expansion plan," Xu told China Daily.

Li Shufu, one of the 100 richest Chinese, according to a recent Forbes magazine list, owns Geely. The firm plans to increase its annual sales to 300,000 units by 2005 and to one million units by 2010. Last year, the company sold almost 50,000 cars.

Xu said Geely is also in joint venture talks with one of the world's major carmakers, but declined to identify which one. Geely aims to go public in Hong Kong and New York within three years, according to Xu.

Geely has two other bases in Linhai in Zhejiang Province and Shanghai, which can produce 150,000 units a year. The company plans to produce four new models this year, including the Meirenbao, the first China-made sports car launched last month.