Chery Automobile has set up a joint venture with Quantum, a US subsidiary of Tel Aviv-listed Israel Corp, in its attempt to expand into the European and American markets.
The joint venture, Chery Quantum Automobile, has been registered at the administration of industry and commerce in east China’s Anhui Province, Chery sources told the Xinhua news agency.
Quantum LLC spent $US225m for a 45% stake in the new entity, while Chery provided mainly technology and land to get a controlling 55%. The two parties planned a total investment of $1.5bn 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% year on year to 381,000 units in 2007. The company remained the country’s fourth largest automobile seller in 2007.