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Geely to produce new energy vehicles in 2012

JINZHONG, Shanxi – A Jinzhong city official in Shanxi Province told media that the municipal government recently signed an agreement with Geely Holding Group on a new energy vehicle production program, according to a local newspaper.

Zhang Pu, mayor of Jinzhong City, said that the city is prepared to invest a total of ¥303.4 billion ($46.13 billion) in the program, with ¥56 billion to be directed this year for the first-phase project of 100,000 new energy vehicles. In addition to new energy vehicle development, the program will focus on engine research and development.

Li Baoqing, head of the Shanxi Development and Reform Commission, stated that the province would vigorously pursue the new energy vehicle program this year, while at the same time continuing to develop the electric car industry. There are additional electric car projects under discussion, Li said.

Jinzhong municipal government began discussions with Geely as early as February 2009, with negotiations progressing during the Shanghai auto show held in April of that year. Negotiations were reportedly not going smoothly for a while as both parties disagreed on land issues. One month later the two parties reached a basic conclusion. Then in the wake of completing its takeover of Volvo, Geely’s president Yang Jian went to Jinzhong in February 2010 and ironed out remaining issues in the negotiations.

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