NC2 Global LLC and Anhui Jianghuai Automobile Co. Ltd. have signed a framework agreement to potentially establish a joint venture in China that would develop, manufacture and sell trucks and truck parts primarily in China and certain export markets.
NC2 is the recently announced global commercial truck joint venture between Navistar International Corp. and Caterpillar Inc. Anhui Jianghuai Automobile Co. Ltd. (JAC) is a manufacturer of automobiles and trucks based in Anhui Province of the People’s Republic of China (PRC).
The proposed 50/50 joint venture would take advantage of the financial strength, technology know-how and global distribution network provided by NC2 and the existing medium-duty and heavy-duty truck business of JAC, including its existing manufacturing facilities in PRC.
“If we are able to reach a definitive agreement, this proposed joint venture would directly support NC2’s strategy to produce and market a full line of commercial on-highway trucks for markets outside of North America,” says Al Saltiel, president of NC2. “The opportunity to leverage existing JAC manufacturing facilities and business relationships has the potential to accelerate NC2’s global business plans. We look forward to working with JAC to quickly bring exciting new products to market.”
There is also consideration that the joint venture would establish its own research and development center in PRC, utilizing a portion of JAC’s existing R&D facilities.
“The proposed agreement offers JAC the opportunity to enhance its productive technology and research and development capacity,” says An Jin, general manager of JAC. “JAC views this potential venture with NC2 as a significant opportunity to continue to develop our truck business.”
The framework agreement contemplates that NC2 and JAC will work to finalize the joint venture by mid-2010, with the exact date depending on the progress of negotiations and due diligence, as well as corporate and regulatory approvals.
