24 May 2007

China's Chery teams with Israeli firm

China’s Chery Automobile Co. plans to set up a car-manufacturing joint venture with Quantum LLC, a U.S. unit of Tel Aviv-listed holding company Israel Corp.

The Wall Street Journal reported Chery said Quantum agreed to set up the $743 million project to make Chery-branded cars for sale in China and abroad.

Quantum will acquire a 45% stake for $225 million, according to Xinhua news agency.

The venture will make four new models, including sedans and sport-utility vehicles, in China. The venture is “not prepared” for export to the U.S. market, according to the Chery official. Xinhua said the venture would produce 150,000 vehicles a year, including Chery’s first high-end sedan.

Chery, based in Anhui Province, is one of China’s fastest-growing domestic carmakers. It plans to double its exports this year, from last year’s 50,000 vehicles, according to Xinhua.