UK-based vehicle transmission specialist Antonov has announced further progress in its efforts to form a joint venture in China to manufacture and market its proprietary TX-6 transmission, with the signing of a letter of intent with Chongqing Lan Dai Industry.
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Antonov previously signed a letter of intent with Sichuan Jianghan Industrial Group. Efforts are now directed to finalise the detailed structure of the joint venture, including the final list of partners, at the earliest opportunity, the company said.
“Lan Dai is an excellent lead partner for the joint venture, delivering the core capabilities of broad market access, mass production knowledge and transmissions technology experience,” Antonov said in a statement.
“Lan Dai is currently completing new factory and office space, part of which could be allocated to the operations of the joint venture. Ahead of any agreement, both Antonov and Lan Dai have [committed] to invest up to EUR2m, in aggregate, in new development projects with other car manufacturers, including Lifan who will participate in building prototype demonstrator vehicles.”
Lan Dai booked turnover of US$70m in 2008 and employs 1,400 people in Chong Qing province and has a well established domestic automaker customer base including Geely, Chery, Lifan, YuAn and FAW. It also has established long term partnerships with companies in Iran, India and Korea.
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By GlobalDataThe letter of intent anticipates that the joint venture will need a minimum of EUR30m of funding, but this could be reduced through access to the existing facilities of Lan Dai. Both parties have demonstrated a willingness to invest EUR15m, but this figure could be reduced by the involvement of other partners.
Lan Dai chairman Zhu Tangfu said: “One million cars a week are made in China, which is now a bigger market than the USA. The partnership with Antonov is a key step for Lan Dai to become the largest supplier of transmissions in China. I am very happy to begin this exciting journey with Antonov, and have demonstrated our confidence in the JV by committing EUR1m for further development work before the final JV agreement is signed.”
Antonov chairman Jos Haag added: “This step further strengthens our relationships with the Chongqing governments and it will create a strong platform to manufacture and market [our] proprietary TX6 transmission, especially since Lan Dai have all the capabilities required to deliver success for a joint venture.”
