SAIC, Italy's Iveco form heavy-truck production unit
Shanghai Daily news
Iveco Corp, a subsidiary of Fiat Automobile Group Corp, will team up with two
leading domestic automakers to start making heavy trucks in China.
global specialist in cargo trucks, has signed an operational agreement with
Shanghai Automotive Industry Corp to form a 50-50 joint venture, SAIC Iveco
Commercial Vehicles Co Ltd. The new firm will produce transport vehicles using
The joint venture bought a 67 percent stake in Chongqing
Hongyan Automobile Group Corp in central China, a subsidiary of Chongqing
Heavy-duty Automobile Group Co Ltd, one of China's leading trucks makers, to
establish another company making diesel engines.
The deal was made a year
after the firms signed a framework agreement to develop a long-term relationship
in the commercial-vehicle industry. The total investment was not
After the acquisition, SAIC Iveco will be able to produce 40,000
trucks and 30,000 engines annually by the end of 2008.
The average growth
rate for heavy-duty trucks was 47 percent in China from 1999 to 2004, more than
double the pace of passenger car growth.
"The venture marks extensive
cooperation with SAIC, the second-largest domestic automaker, which will help
Iveco expand its presence in the most promising market with more competitive
prices," said Paolo Monferino chief executive officer of Iveco Crop, which also
cooperates with Nanjing Automotive Corp in China.
SAIC will focus more on
the development of commercial vehicles in the next five years, significantly
increasing its production capacity and sales in heavy-duty trucks in a move to
acquire a leading position in the segment.
Chongqing Heavy-duty Corp will
also benefit from the cooperation as it will gain more access to coastal cities,
where demand is surging in transport.
Iveco withdrew its investment in
another partner, Changzhou Bus Group, as foreign automakers are allowed to set
up no more than two joint ventures in each market segment.