Zhongyu purchase sees Geely step into special vehicles market
- Source: Global Times
- [14:11 February 24 2010]
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Geely Emgrand FE-1
Zhejiang Geely Holding Group will sign an agreement on February 26 to buy a 100 percent stake in China's Zhejiang Zhongyu Automobile Co., Ltd., bringing it into the domestic special vehicle market, sina.com reported Wednesday.
The purchase will include Zhongyu's property rights and sales network for the special purpose vehicles and commercial vehicles.
There were public questions as to whether Geely's emphasis on Zhongyu's special purpose vehicles and commercial vehicles means that Geely wants to enter the special purpose vehicles market.
"We can't rule it out," said a Geely spokesman. But he also said that currently, the most important reason for the purchase is to move Geely's research center in Linhai, Zhejiang Province to Hangzhou, where Zhongyu has a production base.
Geely's research center in Linhai was where the automaker first developed its core technology.
Established in May 2003, Zhejiang Zhongyu Automobile Co., Ltd., a subsidiary of Zhejiang Zhongyu (Holding) Group Co., Ltd., which specializes in R&D, production and sales of cars.
The company has two production bases in Wuhan and Hangzhou. The Hangzhou base has an academy of design, as well as producing luxury car, limousine bus, heavy-duty truck and passenger cars.
Li Shufu, the Geely chairman, said that in 2010, Geely will certainly meet its sales target of 412,000 units and is striving for sales of 500,000 units or 600,000 units.
