Geely sets up joint ventures in Hunan, Gansu
(AP)Updated: 2007-03-27 13:58
SHANGHAI -- Geely Automobile said Tuesday it has set up two joint ventures with a sister company to build and sell economy cars in inland provinces where the labor costs are low and sales are just beginning to take off.
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Geely Automobile, based in Zhejiang province near Shanghai, said it plans to spend US$75 million on each of the ventures, to be built in central China's Hunan province and in Gansu, in the northwest.
The Hunan venture will be 53.19 percent owned by Zhejiang Haoqing, a Geely subsidiary, and 46.81 percent owned by Centurion Industries Ltd., a holding company registered in the British Virgin Islands that is wholly owned by Geely.
The Gansu venture, to be based near the provincial capital of Lanzhou, will be 53.19 percent held by Zhejiang Geely Merrie and 46.81 percent by Centurion, it said. All companies involved are controlled by Geely's chairman and founder Li Shufu.
Geely has vowed to overcome technical hurdles and the negative image of Chinese manufacturing to begin selling a low-priced family sedan in the United States by 2008. While trying to expand overseas, it also is focusing on the fastest growing segment of the domestic market -- affordable economy cars.
The company, whose name denotes good luck in Chinese, was founded in 1986 and is one of China's few privately held auto companies.
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