just-auto.com

CHINA: Antonov eyes small automatic market potential

By just-auto.com editorial team | 5 October 2007

Transmissions technology company Antonov has agreed to work with Chongqing Loncin General Purpose Engine- a subsidiary of Loncin Holdings- on a pilot project to explore future options for the development, manufacturing and marketing of a small six-speed automatic transmission.

Loncin is a leading Chinese manufacturer of high specification motorcycles, small engines and a range of automotive components. It currently manufactures 1.5m motorcycles a year and over 3m engines both for domestic use and export and also supplies components to domestic and major western automotive brands.

The parties will work together during this pilot project and will each provide EUR1.2m to fund the initial phase - which will produce prototype demonstration vehicles - and carry out marketing activities. In parallel, the parties will be discussing the formation of a manufacturing joint venture during 2008. This is dependent on the success of the pilot project and on agreeing commercial terms.

This agreement reflects Antonov's evolving commercial strategy towards direct involvement in the application of its technology and will enable it to maintain closer control over its intellectual property rights in order to reduce risk and generate better returns compared with a licensing deal.

Antonov CEO John Moore said: "I am delighted with this agreement with Loncin as it provides a second route to market for our technology within the significant Chinese market place."

Loncin chairman Tu Jianhua added: "More and more Chinese customers prefer cars with automatic transmissions. At the moment, all automatic transmissions used within our industry are imported. We believe that our engine manufacturing experience in partnership with the unique resources provided by Antonov provide significant opportunities to address a major market for Chinese-produced automatic transmissions."

Antonov last November signed heads of agreement for a production licence with Zhejiang Geely Automobile Gearbox Co; the transmission manufacturing subsidiary of Geely Automotive for the production of the company's TX6 six-speed automatic transmission.

Under the terms of the proposed production licence agreement, Antonov and Geely would work closely together in order to develop the TX6 to production to meet Geely's 'aggressive' production timetable for its own vehicles and to make the transmission available to other vehicle makers worldwide.