By Zhan Lisheng (China Daily)
Updated: 2007-12-25 09:52

Guangzhou Automobile Group Co Ltd and Japan-based Hino Motors Ltd launched a joint venture yesterday and began work on a plant in the suburb of Conghua to produce and sell commercial vehicles.

Guangqi Hino Motors Ltd is a 50-50 joint venture that will have two manufacturing bases - one in Guangzhou's Conghua and the other in Shenyang, capital of Liaoning Province.

Guangzhou-based Yangcheng Automobile Co Ltd will be reorganized and a massive production facility set up for "Hino" brand heavy-duty trucks in Conghua. Shenfei Hino Automobile Manufacturing Co Ltd in Shenyang will also be restructured.

Involving an investment of 2.4 billion yuan ($327.42 million) and covering an area of 1.06 million sqm initially, the new Guangzhou base will specialize in the production and sale of heavy-duty and light-duty trucks.

The new Guangzhou base is expected to be ready in the middle of next year and will initially produce 20,000 heavy-duty trucks and 30,000 light-duty trucks.

The Shenyang base will involve an investment of 700 million yuan and will focus on the production and sale of passenger vehicles.

The joint venture plans to double the annual production capacity of the existing Shenyang base to 4,000 passenger vehicles by introducing new models and increasing investment.

"The commercial vehicle project is expected not only to enrich the product varieties of Guangzhou Automobile Group but also to boost China's heavy-duty truck production," said Zhang Fangyou, chairman of the board of Guangzhou Automobile Group.

"The well-developed auto industry chain, advanced auto manufacturing capacity in Guangzhou and huge market demand from the country's developing logistics industry means rosy prospects for the new joint venture," he said.

As Hino is a subsidiary of Toyota, he said, the joint venture would not dismiss the possibility of introducing other commercial Toyota-brand vehicles.

Shoji Kondo, president of Hino Motors Ltd, agrees.

"China is one of the world's largest markets for heavy-duty trucks - five to six times as big as Japan's," he said. "We are confident of the future success of our cooperation."

China currently imports about 2,000 Hino heavy-duty trucks. The nation's annual market for heavy-duty trucks is expected to reach 500,000 by 2010 and for this year 480,000, sources said.