(JW Insights) Feb 10 -- Beiqi Foton Motor (福田汽车), Chinese commercial vehicle giant, has unveiled a plan to set up the third joint venture plant with ZF Group, a German auto part maker, reported Yicai Global on February 10.

The pair will build a factory in Jiaxing of eastern China’s Zhejiang Province to produce automatic gearboxes for medium-sized trucks, the Beijing-based firm said on Feburary 9.

The first phase of the project will reach its designated capacity of 55,000 units annually next year, while the schedule of the second phase will be adjusted based on product sales and market situation, it added.

The announcement did not reveal the total cost of the project but mentioned that the plant’s fixed asset investment will be RMB130 million ($19.2 million). The shareholding ratio of the two companies will be decided later, depending on the proportion of the plant’s sales to Foton and third-parties.

ZF’s gearboxes for medium-sized trucks have great competitive advantages in China, and the plant will help Foton improve its competitiveness in the medium-sized trucks market, cut production costs, and ensure a stable supply of core parts, Foton noted.

Foton and ZF already have two JV gearbox plants in Jiaxing. The first one, in which Foton owns a 60 percent stake, has an annual production capacity of 320,000 gearboxes for light-duty vehicles. The second one, in which Foton holds 49 percent of the shares, has a capacity of 190,000 gearboxes for heavy-duty trucks a year.

Foton also has a JV plant for commercial vehicles with Mercedes-Benz Group, formerly known as Daimler, said the Yicai Global report.

(Chen HX)