Date: 2013-07-31

Wanxiang Qianchao Co., Ltd will Establish Joint Venture with Fabbrica Italiana Automobili Torino (FIAT)

Wanxiang Qianchao Co., Ltd (000559) proposed to invest 50 million RMB to establish a joint venture with Magneti Marelli S.p.A which is a wholly owned subsidiary of FIAT to speed up the technique designing development capability, Wanxiang will account for 50% of the stock.

According to the contract, the total investment of this joint venture is 136 million RMB with the registered capital of 100 million RMB, among which Wanxiang provides 50 million RMB in cash, meanwhile MM offers Euro cash with equivalent of 50 million RMB, accounts for 50% respectively. The joint venture is tentatively named as Zhejiang Wanxiang Marelli Shock Absorber Co., Ltd, the registered address is Chuanye Road, Xiaoshan Economic & Technological Development Zone, Hangzhou, Zhejiang province, and the main business scope is to research, develop, manufacture and sale shock absorber and related products, meanwhile also provide relevant technical consultation, assistance and after sales services. The first phase of this investment project will be fully completed by 2015 with the annual production capacity of 5.7 million auto shock absorber, furthermore, it is estimated that the annual sales income will achieve 451 million yuan with the net profit of 43.87 million yuan.

Magneti Marelli S.p.A is a subsidiary of MM who is a wholly owned subsidiary of FIAT, which specialized in the business of auto spare parts. The total assets for the company is 989 million euros, the operating income is 975 million euros in 2010 with the net profit of 32.73 million euros.

Wanxiang Qianchao stated that the cooperation with foreign joint venture will further improve products' technique designing development capability, accelerate the upgrading development forward the mainstream market. In addition, it will also help domestic auto parts enterprises listed among foreign auto companies' Procurement Catalog, thus to become supporting suppliers of auto parts, consequently to open both the domestic and foreign market.

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