Is ZhengDao-JAC JV Win-Win Partnership？

　　According to China Youth Daily, Yang Rong’s “831111”scheme finally gets the way to be achieved in Chinese. On the evening of August 3, JAC announced to have signed letter of intent on new energy and the energy saving vehicles project joint venture with Yang Rong’s Tianjin ZhengDao Equity Investment Management Co., Ltd. The two sides intend to carry out cooperation on new energy saving environmentally friendly vehicles and powertrain products. The future joint venture will be registered in Hefei, whose total investment in the first phase will be no less than 2 billion Yuan.

　　The two partials agreed, as the principal part of the new energy saving car production and sale, in the joint venture, the trademark related to the future new energy saving vehicle project can be used by the JV for free once authorized by the owner while the mature commercialized patents and proprietary technology can be used by the JV at a fair and reasonable price. Previously, Yang Rong has announced a huge plan: to invest 10 billion U.S. dollars in the United States to build a production base of 3 million vehicle capacity. In China, Yang Rong plans an investment of 40 billion to 45 billion Yuan to build a production base of 3 million engines and 1 million vehicles capacity. Yang Rong also has made an unprecedented attractive commitment to local government out，which is called 831 111, that is in the next 8 years, production capacity of 3 million, output value of 1 trillion, 100 billion Yuan revenue, 100 thousand jobs and per capita income of 100,000 Yuan.

　　Comment: with progress in independent research and development, taking Yang Rong’s ambitious plan, the clumsy bird JAC have chosen to start flying early and is prepared to make a giant at one time. The road of JAC’s independent research and development has been ups and downs all long. It several products are all unpopular in the market. In the first half of this year, JAC only sold out 62,259 cars. In 2009, JAC suffered a loss of 270 million Yuan while its accumulated investment in sedan reached more than 20 billion Yuan. Using commercial vehicles to subsidize sedans all along, JAC can only manage with an effort. However, since large-scale is started, the development of sedans has been quite powerless. In the key technologies such as autonomous powertrain, JAC also has no commendable products. From the current reputation and influence of JAC in the industry, it is almost impossible for JAC to the cooperation with foreign major corporations. JAC and ZhengDao is like a pair of fellow sufferers, the former is a marginalized independent brand, received much sympathy in the industry while the latter is good at hype but has a bad reputation.

　　What is the JV of these two companies will be? Can Yangrong’s highly demagogic nano-engines, natural gas hybrid and near zero emission internal combustion engine technology be achieved in JAC? Can the output of JAC grow to 3 million from annual100, 000 units within 8 years under the careful nurturing of Yang Rong? If this is true, all Chery, Geely and BYD will disappear then.

　　(Translator: Yalong/Jessie)

　　See original Chinese report Please click: http://auto.sohu.com/20100805/n273998658.shtml