JAC to make automatic transmissions

GUANGZHOU -- Anhui Jianghuai Automobile Co. (JAC) plans to start making four-speed automatic transmissions sometime around September this year. The company is building production lines in Hefei, the capital of Anhui province. Once operational, they will have a total capacity of 100,000 units per year.

Documents released by the local government indicate JAC bought the technology last year from German powertrain engineering company Hofer Powertrain GmbH for about 2 million euros (21.7 million yuan).

In China, automatic transmissions are still considered high-tech products and the suppliers are predominantly foreign companies or their joint ventures.

Although it is well-known for its commercial trucks and buses in China, stated-owned JAC is still a tiny player in the domestic passenger vehicle sector. It has a small van, an SUV and a sedan on the market now. Total sales of the three passenger vehicle models were 48,114 units last year.

The company released two documents on its Web site recently to elicit public comment on the environmental impact of the automatic transmission project. It is a procedure it has to go through to win government approval of the project.

The documents say JAC will build the production lines inside the company's No.1 engine plant in the Hefei Economic & Technological Development Zone. The automatic transmission has a product code of ATF460.

Total investment in the automatic transmission production project is projected to be 410 million yuan ($59 million). Once operational, it will have 285 workers working two shifts a day.

The documents do not say when the company will start making the transmissions. JAC declined to comment on the project.

But a manager from JAC says the company has already started building the production lines, and it plans to start trial production of the transmissions sometime around September this year.

"The four-speed transmissions will be initially mounted on the Benjoy sedan and Rein SUV," the manager says.

A document released by the taxation bureau under the Anhui provincial government indicates JAC bought the transmission technology from Hofer Powertrain last year.

"Hofer transferred the technology for the design and manufacture of the ATF460 automatic transmissions to JAC in May 2007, and the value of the contact is 2,058,000 euros (22,359,000 yuan)," says the document.

Since the technology was deemed high technology, its transfer was exempt from import duties.

But Tom Tan, president of BorgWarner China, says a four-speed automatic transmission is already obsolete since developed markets have moved to five-speed automatic transmissions.

"It is for low-end vehicles of 100,000 yuan($14,310) and below," he says.