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Chinese Government approves engine joint venture between Navistar and JAC

ABR Staff Writer Published 24 August 2012

The proposed joint venture between medium, heavy trucks and mid-range diesel engines manufacturer Navistar and Chinese truck maker Anhui Jianghuai Automobile (JAC) has received a formal approval from the Chinese government.

The new engine joint venture will invest about CNY1.8bn ($284.12m) to set up a new engine production facility which is expected to be completed before the end of this year.

The JV facility will produce about 150,000 engines per year from October next year, which will include JAC HFC4DA1 series of diesel engines as well as various Navistar MaxxForce diesel motors.

Formation of the JV will provide JAC with access to Navistar's Euro IV and Euro V compliant technology to produce commercial trucks for Chinese market as well as offer JAC export opportunities for its light, medium and heavy-duty commercial trucks.

JAC chairman An Jin said the partnership with Navistar will bring diesel and commercial truck technology to its customers.

"Durable, fuel efficient products will enable JAC to continue leading in the commercial vehicle market in China and to export globally," An Jin said.

The two companies will produce Navistar's MaxxForce 3.2, 4.8, 7.2 and JAC's 2.8 4DA1 litre engines, under the JV.

In September 2010, Navistar had signed the joint venture agreement with JAC to develop, build and market advanced diesel commercial engines in China which was awaiting approval from the Chinese goverment since then.

In addition, both the companies plan to formally submit their commercial truck joint venture application to the Chinese government later this fall and also signed letters of intent (LOIs) to collaborate on design and production of light-duty commercial truck export opportunities for Navistar dealers in Brazil and Mexico.