Geely subsidiary signs joint EV venture deal
China Daily/Asia News Network
February 6, 2013, 11:58 am TWN
BEIJING -- Shanghai Maple Guorun, a subsidiary of Zhejiang Geely Holding Group's Hong Kong-listed arm, said that it has signed an agreement with Kandi Vehicles to set up a 50-50 joint venture for electric vehicles.
With registered capital of 1 billion yuan (US$160 million), the joint venture will engage in the investment, research and development, production, marketing and sales of electric vehicles on the Chinese mainland.
The venture will not become a subsidiary of Geely or Kandi, and its financial results will not be consolidated into the financial statements of either groups or their respective subsidiaries, Geely Automobile Holding Ltd said in a statement to the Hong Kong Stock Exchange.
"The cooperation with Kandi Vehicles, subsidiary of Nasdaq-listed Kandi Technologies, is a carefully considered integration of both parts' advantages on technologies and models in the new-energy vehicle sector," said Yang Xueliang, a spokesman for Geely.
"As a company that has always been putting heavy investment and efforts in electric vehicles, a sector in which we see huge potential, Geely took a fancy to Kandi's smaller-sized, low-cost and low-speed electric vehicles," Yang said.
Yang adds that though Geely has launched its pure electric vehicle models EK-1, EK-2 and plug-in hybrid cars EC7, EC8 in recent years, sales to private customers are still at a standstill.
Statistics from the China Association of Automobile Manufacturers show that in the first three quarters of 2012, China only sold 3,000 electric vehicles, the majority going to government and corporate customers.