Dongfeng signs deal with Detroit Electric
Updated: 2009-06-20 07:14
By Joey Kwok(HK Edition)
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HONG KONG: Dongfeng Motor Group, the third-largest automaker on the mainland, will cooperate with Detroit Electric Holdings to research, develop and sell electric vehicles on the mainland, according to a strategic agreement signed by the two companies on Friday.
Dongfeng Motor will test and validate Detroit Electric's electric drive technology to produce and market the electric vehicles, the agreement said.
Dongfeng Motor and the Netherlands-based Detroit Electric are also in discussions to form a joint venture company to manufacture, assemble, produce and supply the electric drive technology to the Hubei-based Dongfeng Group and other automotive manufacturers.
"This validation process is major proof of the technical leadership and commercial readiness of our electric motor drive technology. We look forward to working closely with Dongfeng and exchanging our experiences," Albert Lam, chairman and chief executive of Detroit Electric said in a statement on Friday.
Lam added that the partnership with other automakers will help promote the company's electric drive technology and propel the electric-vehicles industry forward.
"This cooperation with Dongfeng allows us to work closely with a strong partner in China to explore ways to enter the world's largest vehicle market," Lam said. "I believe our pure electric vehicles will appeal to many Chinese consumers and benefit everyone."
Detroit Electric has signed a strategic licensing and contract assembly agreement with Malaysian automaker Proton Holdings in March, valued at 1.2 billion yuan annually.
The company has also targeted to sell 45,000 electric vehicles in the US, Europe and Asia by 2010, increasing to 270,000 by 2012.
In the first quarter of 2009, net profits of Dongfeng Motor amounted to 851.2 million yuan, although the company did not give any comparative figures.
The mainland carmaker earlier said its vehicle sales in May rose 6.44 percent year-on-year, compared with the 34 percent increase in the mainland market.
Moving in line with the State Council's 10-billion-yuan investment in alternative-energy vehicles over the next three years, mainland automakers are playing a more active role in developing green vehicles.
BYD, the largest maker of rechargeable batteries on the mainland, started to launch petroleum-and-electricity hybrid cars on the mainland last year.
The battery maker has earlier signed a strategic partnership with MidAmerican Energy, a subsidiary of Warren Buffett's Berkshire Hathaway, in September 2008.
The partnership was expected to enhance BYD's development of green cars and further promote the company's electric vehicles to the North American market.
Shares in Dongfeng Motor advanced 6.34 percent, or HK$0.4, to close at HK$6.71 on Friday.
(HK Edition 06/20/2009 page5)