Chinese automaker Chery sets up joint venture with U.S company

In an attempt to enter the US and European markets in a big way, well-known Chinese carmaker Chery Automobile Co known for making low priced cars has entered into a joint venture with Quantum LLC, the U.S. subsidiary of Israel Corp, based in Israel and listed in the Tel Aviv Exchange. The joint venture Chery Quantum Automobile has been registered at the administration of industry and commerce in east China's Anhui Province, Chery officials said.

Quantum LLC will hold a 45 per cent stake in the joint venture which it has bought for $225 million. Chery will provide the land as well as technology and will hold the controlling 55 per cent stake in the venture. The two companies will together make a total investment of $1.5 billion in the joint venture, said to be the biggest joint venture in East China's Anhui province so far. 

According to a statement from the local government of China's Anhui province the aim of the new venture, is to develop Chery's own core technologies and high-end products  and to actively get involved in global competition.

Chery has developed keen technological prowess owing to the fact that it has never had a major foreign joint venture partner with which to share vehicle technology. As a result, it has a well-established model development and research and development (R&D) department that has developed a full range of passenger cars.

Chery officials said the joint venture will enable Chery to add larger models because of the rising competition in China's car market. They said the new models may have six-cylinder, 3-litre gasoline engines.

Quantum will also benefit through the venture, as it will now be able to enjoy a presence in China the fastest growing automobile market globally.