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Yesterday, G. Futian (600166.SH) announced that the joint venture project between Beijing Foton and Cummins will be delayed due to government approval procedures.
According to the relevant agreement signed on March 6 this year, Beiqi Foton teamed with a Beijing company and Cummins Inc. and Cummins China Investment Co., Ltd. to set up a joint venture this year. According to plan, this joint venture will be established before the third quarter of this year.
Regarding the stranding of the joint venture project, Beiqi Foton related parties explained in an interview with the “First Financial Daily†that some of the documents submitted to the government for approval failed to be submitted according to procedures as scheduled, resulting in the temporary establishment of the joint venture company. However, the relevant person emphasized that this joint venture project is still going well.
On March 6th this year, Cummins Inc. of the United States disclosed that it had signed a feasibility study with Beiqi Foton on the joint venture to establish a light-duty diesel engine production enterprise. According to the feasibility study report, Cummins and Foton will form a 50:50 joint venture to form a joint venture to produce a new generation of Cummins light-duty diesel engines. The joint venture is expected to be established in 2006 and put into production in 2008. This is Cummins' largest investment in global engine production giants in China. According to the agreement signed by both parties at that time, the total investment was 1.946 billion yuan, and the registered capital was 1.019 billion yuan. The funds were available within 3 years. Jin Yongsheng, Senior Research Fellow at Xinhuaxin, said in an interview with this reporter that if the joint venture is established, this will mean an important transformation of Cummins globally, which marks the first time Cummins will enter the field of light commercial vehicles on a large scale.
At present, Cummins has basically completed its strategic layout in China. According to Cummins, the cooperation with China Dongfeng Commercial Vehicles, which has the largest sales of medium trucks in China, will win 4 to 9 litres of the engine market. With over 15 tons of heavy truck sales overbearing, Shaanxi Automobile will win over 11 liters of engine market, and a joint venture with Beiqi Foton. It mainly focuses on the leadership of Beiqi Foton in the light truck market.
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