Shanghai, June 11 (Gasgoo.com) Anhui Jianghuai Automobile Co. (JAC) is finalizing a 4 billion yuan ($586 million) truck and engine joint venture deal with construction and mining equipment manufacturer Caterpillar Inc. and truck maker Navistar International Corp., Reuters reported today.
Initial investment in the Caterpillar/Navistar China project will be twice the previously disclosed 2 billion yuan, as Jianghuai Auto and Navistar are also planning a separate 50-50 joint venture for diesel engines. "The engine venture is meant to be a supplier for the truck project," a source said.
A framework agreement was signed in September 2009 to build a 2 billion yuan 50-50 heavy truck venture between Jianghuai and Caterpillar-Navistar tie-up NC2 Global. The heavy truck project in Jianghuai's home base in the eastern city of Hefei, will initially produce 40,000 units per year.
"The partners have already reached agreement on major issues. They are pouring over some technical details now and the case could be closed pretty soon," the source told Reuters.
The deal, if it goes ahead, will make Caterpillar and Navistar the latest entrants in China's 150 billion yuan heavy-truck market, joining Daimler and other European rivals.
It would also provide a new growth opportunity for Jianghuai, China's major MPV (multi-purpose vehicle) producer which is expanding into car and heavy-truck manufacturing.
