Geely Automobile and Lifan Technology set up a joint venture company to upgrade the car manufacturing business with a capital investment of 300 million yuan each

Per reporter: Sun Tongtong Per editor: Sun Lei

Image source: Visual China

On December 13, Geely Automobile (00175. HK) announced that it intends to cooperate with Lifan Technology (601777. SH) jointly invested in the establishment of a joint venture company, with a registered capital of RMB 600 million for the target company, and Geely Holdings and Lifan Technology each contributed RMB300 million, with a shareholding ratio of 50%.

Upon mutual agreement, the two sides may designate a separate entity to make the capital contribution. The capital contribution is mainly used for daily operations such as research and development, operation strengthening, market development and brand stability maintenance. As of now, Geely Technology holds 28.98% of the shares of Jolifan Technology, while Li Shufu, chairman of Geely Holding Group, holds about 91% of the equity of Geely Technology.

The business scope of the joint venture company is the design, research and development and sales of complete vehicles (including accessories, parts processing equipment, automobile decoration); import and export of goods, agent import and export, technology import and export; software development; technology development, technical services, technical advice, and technology transfer.

Geely Automobile said in the announcement that the establishment of the joint venture company is based on the principle of "complementary advantages, mutual support, long-term cooperation and common development", and its ultimate goal is to jointly promote the transformation and upgrading of Lifan Technology's automobile industry through research and development, sales and operation of vehicles (including but not limited to tram exchange), so as to promote the rapid increase of the overall market share of its products in the passenger car market. At the same time, the establishment of the joint venture company can continue to promote the upward development of the Geely brand, and form a complete coverage of different levels of the mainstream market through the combination of each brand.

Lifan Technology said that Geely Automobile will fully support the management and operation of the joint venture's car-making business, and jointly promote the transformation and upgrading of Lifan Technology's automobile industry with Lifan Technology, relying on Geely Automobile's systematic advantages and professional capabilities in the whole process of car manufacturing, through fine management and industrial empowerment, integrate, improve and upgrade Lifan Technology's automobile research and development system, supply chain management, technology platform, sales channels and systematic full-manufacturing management program to achieve win-win development.

At the same time, the two sides will coordinate travel companies and power exchange service companies, match models, and work together to build a power exchange network ecology and promote the development of urban power exchange standardization. The joint venture will continue to develop and upgrade its vehicles to meet market demand and create more value for listed companies.

It is worth mentioning that this is the in-depth cooperation between Geely Automobile and Lifan Technology since the reorganization of Lifan Technology. As early as January this year, Lifan, which has been in the quagmire for a long time, announced the completion of the reorganization work, renamed from Lifan Industry (Group) Co., Ltd. to Lifan Technology (Group) Co., Ltd., and introduced ManjiangHong Fund and Geely Metrojet Investment Co., Ltd. (hereinafter referred to as Geely Metrojet) as strategic investors and industrial investors, and Xu Zhihao, director of Geely Holding Group and CEO of Geely Technology Group, served as the chairman of Lifan Technology.

According to Qixinbao data, Geely Milestone is owned by Geely Technology Group Co., Ltd. and Hangzhou Jixing Technology Co., Ltd., a subsidiary of Geely Holding Group, which hold 99% and 1% of the shares respectively.

In May this year, Lifan Technology announced the resumption of its automotive business, and its first new model, the 80V, has completed mass production at the Caijia production base in Chongqing. It is understood that this new car is imported by Geely Technology Group, which is a power-changing pure electric B-class MPV, and the NEDC cruising range is 400 to 500 kilometers.

According to Lifan Technology, in addition to the Lifan 80V, this year will also launch 60S and 80X two power replacement models, of which 60S will face the taxi market to replace the car, 80X is a large replacement SUV, mainly for official car customers. In addition, Lifan Technology will also launch a number of new models to meet market demand.

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