HEFEI, Anhui – Jianghuai Automobile Co., Ltd. (JAC) plans to invest ¥50 million ($7.25 million) in a project to produce 1.9L CTI diesel engines for passenger cars, according to a company statement on October 30.
At the same time, JAC intends to join hands with Navistar to set up a joint venture for commercial vehicle diesel engine business with an investment of ¥1.5 billion from both sides, said the statement.
Construction of the engine plant is expected to be completed within 18 months. The new facility is designed with an annual capacity of 20,000 units of 1.9L CTI diesel engines with two shifts running.
In late September, JAC signed a framework agreement with NC2 Global LLC (a joint venture between Navistar and Caterpillar) to forge a 50:50 JV to develop, produce and sell medium- and heavy-duty trucks and truck components in China and certain export market.
With a minimum registration capital of ¥8 million, the two partners plan to invest at least ¥2 billion in the new JV, which is expected to triple JAC’s current output capacity of medium- and heavy-duty trucks.
JAC posted a third-quarter profit of ¥140 million, increasing 194.73 percent year-on-year. Whole-year net profit for 2009 is expected to climb over 50 percent from last year, said the statement.