Chongqing Qijiang Gear Transmission (Qijiang Gear), a subsidiary of Chongqing Machinery and Electronics Holding Group (CQMEG), is about to form a transmission joint venture with ZF Friedrichshafen AG (ZF), the world’s leading automobile supplier, according to a local news report.
As confirmed by Chongqing Municipal Development and Reform Commission (CMDRC), the two companies’ negotiations on partnering have made remarkable progress of late, and a formal cooperation contract might even be signed in June if everything goes as planned. The Chinese and the Germans plan to form a production base in Qijiang County of Chongqing, with annual production of 300,000 units of transmissions and an output value at ¥5 billion ($735 million), with the hopes of leading China’s commercial vehicle transmission market.
A CMDRC official disclosed that a research team, formed at the beginning of this year by members from CQMEG, ZF, Qijiang Gear and the local government, has already carried out investment feasibility studies for the partnership. ZF has also prepared for the collaboration by going through its internal investment decision-making procedures. It is very likely that the June signing ceremony will take place on schedule.
The two firms started initial collaborations 25 years ago. Qijiang Gear, established in 1928, was brought into the China Heavy-Duty Automobile United Company in 1984, together with another transmission maker, Shaanxi Fast Gear (Fast Gear), as part of a government project to develop heavy-duty vehicles with international technology cooperatives. In the second year of collaboration, the Chongqing transmission maker introduced design and manufacturing technologies from ZF, while Fast Gear adopted a 9-speed transmission model from U.S. auto supplier Eaton.
Qijiang Gear currently produces 16-speed transmissions, the QJ16 series, for heavy-duty trucks under ZF technologies. It is reported that the Qijiang Gear-ZF negotiations, which hope to turn a mere technology cooperation into a capital partnership, have been on and off over recent years, with the main point of contention lying in shareholder proportioning. Once established, the joint venture will cover a full range of commercial vehicle transmissions, and products from ZF’s factories in Suzhou and Hangzhou will also be introduced to the firm.