China Yuchai forms engine JV

(chinatrucks.com, Dec.30, 2009)China Yuchai's subsidiary Guangxi Yuchai Machinery Company Limited (GYMCL) is forming a new joint venture company in collaboration with Jirui United Heavy Industry and Shenzhen City Jiusi Investment Management Co. Jirui United is owned by China International Marine Containers Group Ltd (CIMC) and Chery Automobile.

The new venture, Y & C Engine Co, Ltd, will be based in Wuhu City, Anhui Province and has a registered capital of Yuan 500m (US$73.2m). GYMCL and Jirui United each hold 45% in the new venture, with Jiusi holding the remaining 10%. The partners are currently awaiting regulatory approvals.

The joint venture will focus on production of heavy-duty vehicle engines with displacements from 10.5 litres to 14.0 litres. In particular, it will concentrate on building GYMCL' s new YC6K diesel engine, targeted at use in trucks of 12 metric tons and above and for passenger coaches longer than 12 meters. The venture will also have a licence to build GYMCL’s YC6M and YC6L heavy-duty diesel engines under the Yuchai logo and trademark. GYMCL will provide after-sales service for all products sold by the new company and supply it with certain components.

Initial annual production is estimated at 50,000 heavy-duty diesel engines, eventually rising to 200,000 units. Most of the engines will be supplied to GYMCL and CIMC-Chery, the latter of which produces medium to heavy duty freight trucks.

"We are excited about the potential of this new joint venture as part of our strategy to further penetrate the higher-margin heavy-duty diesel engine markets," comments China Yuchai president Boo Guan Saw. "Through this joint venture, we will be combining resources, developing new manufacturing capabilities and ensuring continuous demand."

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