Auto boss Yang back with green vehicle JV
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Anhuai Jianghuai Automobile Co Tuesday said it would team up with United States startup Hybrid Kinetic Motors Corp to jointly invest 30 billion yuan (US$4.4 billion) for developing eco-friendly new-energy vehicles and related accessories in China.
JAC and HKMC signed a framework agreement on Sunday to form a 50-50 joint venture with an initial investment of no less than 2 billion yuan, the Chinese car maker said yesterday in a statement submitted to the Shanghai Stock Exchange.
A new production base is expected to be set up in Hefei, capital of Anhui Province, with the aim to achieve an annual production capacity of 1 million new-energy vehicles, 1 million powertrain systems and 12-million-kilowatt-hour lithium batteries within eight years, JAC said in the statement.
The new joint venture is still subject to government approval, JAC noted.
"The cooperation provides JAC with a financing channel, advanced technologies and expertise for boosting its green car business as it has failed to take the lead in the traditional combustion engine sector," analyst Gao Li with Huachuang Securities said.
The tie-up has sparked a huge media buzz because it marks the return of the powerful but controversial auto boss Yang Rong.
HKMC was set up by Yang, also known as Benjamin Yeung, who was previously the founder of Brilliance China Automotive Holdings, BMW's Chinese partner. Yang fled to the US in 2002 after being charged with economic crimes.
Yang's disputed background is still the biggest challenge to the project, industrial analysts suggest.
Independent auto analyst Jia Xinguang said: "We have to wait and see if Yang's aggressive auto dream will get government support, considering the controversies surrounding him."
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