CSR unit to set up diesel engine JV with GE

CSR Qishuyan Locomotive and Rolling Stock Co Ltd, a subsidiary of China South Locomotive and Rolling Stock Industry (Group) Corp (CSR), signed a supplementary letter of intent with General Electric (China) Ltd (GE) last week to jointly set up a diesel engine company, the Shanghai Securities News reported.

Under the agreement, the two sides will invest about US$90 million in the 50:50 joint venture, which will be engaged in the production, assembling, testing and sales of diesel engines for vehicles and ships, maintenance services as well as processing parts and components of diesel engines.

Upon the completion the new venture, it will have an annual capacity of 650 diesel engines.

Pursuant to the letter of intent the two sides signed in September 2007 and the supplementary agreement, GE will shift all its manufacturing facilities of FDL diesel engines worldwide to the joint venture within an agreed transitional period and thus the joint venture will become the only manufacturing center of GE's FDL diesel engines.