Geely Holding Group, Guangxi Yuchai Machinery Co., Ltd and Zhejiang Yinlun Machinery Co., Ltd officially signed contract to establish a joint-venture company to produce passenger car diesel engine at the end of last year, the reporter learned from Geely Holding Group last week. According to the contract the total investment for the joint venture company C Zhejiang Yuchai Sanli Engine Co., Ltd (current name) was nearly 500 million Yuan and the initial investment would be over 200 million Yuan. The annual output and total planning production would reach 50,000 and 150,000 respectively. People in Geely Holding Group told us last week that the purpose of this joint-venture company was to develop and produce the national first-class and world leading diesel engines of over 2.0 liters displacement.

    The reporter also learned that the joint venture company would build two production bases; one would be located in Zhejiang Tiantaishan where is also the location of Zhejiang Yinluns headquarter; and the other would be in Jining which is Geely Holding Groups new production base of new cars. Guangxi Yuchai would hold 52% shares of the joint-venture company, Geely Holding would take 30%, and Zhejiang Yinlun would hold the rest 18% shares.

    People of Geely Holding revealed last week that the company would start building factory soon and would produce the first 2.0-liter displacement Europe-V diesel engine in 2009. Besides 2.0-liter diesel engine, the joint-venture company would also produce 1.8-liter and 1.6-liter diesel engines. The engine will be used in Geely cars for international markets.