Xugong Group invests 500 million in advance into heavy truck field
XCMG Group and Nanjing Dongchi Automobile have entered into a strategic agreement to invest RMB 500 million in the development of a massive 100 billion yuan automobile industrial base in the Tiexinqiao area of Yuhuatai District, Nanjing. This marks a significant shift in the local automotive landscape, as the former Chunlan Automobile Factory, which once occupied a 600-acre site, has undergone a major transformation.
The property rights of the original Chunlan Automobile Co., Ltd. in Tiexinqiao were recently changed when XCMG acquired a 60% stake from Jiangsu Chunlan for RMB 170 million. This move led to the establishment of Nanjing Xugong Automobile Manufacturing Co., Ltd., combining XCMG's resources with the existing infrastructure.
Ten years ago, Chunlan Group partnered with Nanjing Dongchi Automobile Industry Group to form Nanjing Chunlan Automobile Manufacturing Co., Ltd., with each holding 60% and 40% of the shares, respectively. The joint venture was based in Tiexinqiao and had an annual production capacity of 8,000 heavy-duty vehicles, generating around 1 billion yuan in revenue. However, due to intensified market competition, Chunlan Group decided to restructure its operations and exit the partnership with CNHTC.
Wang Min, Chairman of XCMG Group, emphasized that the company will leverage its financial strength and technological expertise to enter the heavy truck industry. He stated that XCMG aims to revitalize and develop Jiangsu’s heavy truck sector by utilizing the original Chunlan factory base. According to the investment plan, RMB 500 million will be allocated before the end of this year, followed by further investments of between RMB 1.5 billion and RMB 2 billion over the next two to three years.
The project includes the construction of new factory areas, product innovation, and a clear production target: 5,000 units in the next year, 10,000 the following year, and up to 20,000 by 2011. This ambitious expansion is expected to significantly boost the region’s manufacturing capabilities and strengthen its position in the national and international automotive markets.
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