Antonov, the UK-based vehicle transmission specialist, has informed shareholders that the formal incorporation of its joint venture company in China with Chonqing Landai Industry Co Ltd, for the production of the Antonov TX6 automatic transmission, has been completed and a certificate of incorporation has been issued by the Chinese authorities.

Antonov's initial investment in the joint venture is EUR2.5m of which EUR375,000 is payable within 90 days of the incorporation with the balance to be paid within two years.  The company expects that this will be met through its EUR15m loan facility with Quivest announced on 19 February 2009.

Landai is in the process of building a new manufacturing facility for its existing operations at its new site in Chongqing and part of this new facility will now be allocated for the production of the TX6, which is expected to commence in Q4 of 2011. 

Once completed, production capacity is expected to equal approximately 200,000 units per year.   Antonov and Landai, meanwhile, are working closely together to market the transmission to car manufacturers in China.

Antonov and Landai are also in the process of finalising various agreements in relation to the joint venture, including the license agreement, under which the joint venture will manufacture the TX6, and the engineering services agreement, under which Antonov will provide support to the joint venture in moving the TX6 into mass production.  Both these two agreements are expected to be signed in December 2009, Antonov says.
 
Antonov maintains that 'all technical targets for the TX6 were achieved in 2008', including shift quality and drive comfort, noise, efficiency and fuel consumption, as well as manufacturing feasibility. 

This year, it says, has seen the finalising of the key parameters of the production design of the TX6, one of which is its compact transverse length of 320mm, making it suitable for smaller vehicles as well as mid size cars.

The intention is that initially approximately 60 per cent of the production components for the TX6 will be manufactured by Landai, increasing to higher levels in the years to follow.  Antonov has also selected Conti Temic Microelectronic GmbH for the development and implementation of control software for the TX6 as well as for the delivery of the production Transmission Control Unit or TCU.  Antonov is currently in negotiations with a potential supplier of hydraulic blocks for the TX6.

Commenting on the incorporation of the joint venture, Dr Jos Haag, Antonov's chairman and chief executive, said in its London Stock Exchange announcement issued on 6 November 2009:  "Today marks an important step in Antonov's strategy to produce and distribute the TX6 in China.  Production of front wheel drive vehicles in China with transversely mounted engines up to 270Nm torque is forecast to exceed 1.8 million vehicles in 2012 and the TX6 offers a competitive proposition for manufacturers in this market segment."

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