Chinese Auto - Geely

Excerpt from Reuters

Geely Automobile Holdings Ltd. <0175.hk> sealed a deal with Britain's Manganese Bronze Holdings Plc on Thursday to make iconic black London taxi cabs in China, as China's motor industry woos the overseas market.

Geely -- which makes some of China's cheapest vehicles and harbours ambitions of selling beyond its home market -- will set up a US$54.3 million car-making venture in China by mid-2008.

Manganese gets 48 percent of the joint venture, in return for which Geely gets two board seats and 23 percent of the British firm -- becoming its largest shareholder.

Manganese Bronze hoped to win shareholders' approval for the deal in early 2007, said group finance director Mark Fryer.Under the agreement, the partners aimed to produce around 40,000 cars annually -- about 10,000 of the London cabs and 30,000 limousines or sedans -- in Shanghai.

Manganese Bronze gains access to cheaper Chinese-made auto components -- some of which executives have said they intended to export to Britain.

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The auto maker plans to more than double its annual production capacity to 650,000 vehicles in two years, from 300,000 planned for the end of 2006.

Comments: The people of Geely are smart. They learn through joint development/joint venture/paid service from other specialized suppliers, obtain the technology, and develop and produce its own version. Geely's CVVT engine is co-developed with FEV.

Geely might be too fast to come to international market. They are trying to follow Toyota's footprint. Toyota might at the same development stage have tried to enter the world auto market, especially NA. The Americans ridicule the car, laugh at its shabby quality. But after 10 years, 3 rounds of release, at the beginning of 1980s', Japanese had already become threat to Big threes.