Geely acquired Benz partner ZHONGYU

　　Although hasn’t completed the acquisition of Volvo, Geely Holding Group (hereinafter referred to as Geely Automobile) will quickly complete the acquisition of whole shares of commercial vehicle corporation Zhejiang ZHONGYU Automobile Co., Ltd. (hereinafter referred to ZHONGYU Automobile car). This means that Geely formally entered the domestic special vehicle market and it will develop or build high-end commercial vehicles, passenger cars and special vehicles by using existing technologies and equipment, which will further enrich multi-level product line of Geely.

　　Reporter of China Security Journal knew that specific signing time will be on February 26 2010. As a matter of fact, signing time has been changed for two times on February 24 2010 and the overall preparation time and plan are very urgent.

　　Person in charge of the acquisition at Geely told reporter that matters related to the acquisition have been finished, and specific signing time will be held at 5 p.m., February 26 2010 at the Great Hall of the People in Hangzhou. However, both sides have no plan to reveal information such as the amount of acquisition.

　　ZHONGYU Automobile is one of core industries of Zhejiang ZHONGYU HOLDING GROUP established based on original Dongfeng light bus factory. Besides, this corporation is a large-scale automobile manufacturing enterprises and mainly produces medium class and high-end commercial vehicles and special vehicles. Currently, ZHONGYU Automobile has two production base including Wuhan and Hangzhou. Moreover, it is the biggest Asia strategic cooperation partner of Germany Daimler Chrysler and Mercedes-Benz. Annual production capacity of Wuhan base is supposed to reach 100 thousand units.

　　Sales and after-sales service network of ZHONGYU Automobile spread across east, south, north, central and north-east China. Products of the corporation have gained recognition from professional market. Through this acquisition Geely can get development intellectual property on special and commercial vehicles of ZHONGYU Automobile.

　　At the same time, average annual growth rate of special vehicle market is 25%, ranging from 2005 to now. In 2010, annual demands for commercial special vehicles will reach 700 thousand units, while the current domestic production capacity of special vehicles is only 300 thousand units. Acquisition of ZHONGYU Automobile is beneficial to help Geely Automobile’s output reach 1 million units.

　　On February 25, 2010 a person in charge of the acquisition confirmed that Geely will build technology center in Hangzhou, Zhejiang province. Geely Automobile first plans to invest 350 million RMB to build a safe collision center. Functions and settings of automobile research institute of Geely Automobile in Linhai, Zhejiang province will remain the same. Additionally, automotive technology center located in Hangzhou will be the core of Geely’s R & D system.

　　It is noteworthy that factory of Zhongyu Automobile is next to a 170 acres land belonging to Geely Automobile for creating its technology center. After the acquisition Geely can get a 120 acres land in Hangzhou which will be built as Geely Automobile’s technology center and can help Volvo expand production scale in China.

　　Geely Automobile sold 330 thousand units entire vehicles in 2009 and grew at the speed of 48% compared with 2008. Geely is determined to increase its production capacity to 2 million units in 2015 and the company hasn’t formally expanded production capacity of its Lanzhou base. In addition, Geely’s acquisition of Volvo is probably completed before the second quarter and then it will build a production base whose annual output could reach 300,000 units in Beijing. (Translator: Qinghua Wade)

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　　http://auto.sohu.com/20100226/n270438744.shtml