BEIJING, People's Republic of China (PRC) – Caterpillar Inc. (NYSE: CAT) and Shaanxi Fast Gear Co. Ltd. (Fast Gear) will form a joint venture to manufacture drivetrain systems and other complex components for Caterpillar machinery and produce a line of on-highway automatic transmissions.
"This joint venture continues the Caterpillar strategy to develop partnerships with leading Chinese companies as we deploy our comprehensive business model in China," said Hans Haefeli, Caterpillar vice president with responsibility for the Advanced Components and Systems Division. "It will provide Caterpillar with competitive drivetrain components and systems as well as an Asian source for our CX28 and CX31 transmissions."
Caterpillar would be a 45% stakeholder in the joint venture; Fast Gear, which is partially owned by Weichai Power Co. Ltd. would have 51%, and Shaanxi Fast Auto Drive Group Co. Ltd. would hold a 4% stake.
"Since the early 1990s, Caterpillar and its independent dealers have made significant investments to build on our more than 35 years of experience in China," said Kevin Thieneman, Caterpillar country manager for China. "We are committed to continued expansion of the range of products and components produced in China to increase and improve customer support."
Today, Caterpillar has nearly 8,000 employees across China.
"This joint venture with Caterpillar will propel us to the same leadership position in heavy duty on-highway automatic transmissions that has taken us many years to build in heavy duty on-highway manual transmissions," said Li Da Kai, chairman and president of Shaanxi Fast Auto Drive Group Co. Ltd. "We are partnering with Caterpillar, a respected world leader and starting this joint venture with proven products. We are confident about the growth potential for this business."
In addition to the production of Caterpillar machine components, by partnering with Fast Gear, the joint venture will build upon the existing Cat CX series on-highway transmission product line to expand globally. The joint venture, which is pending appropriate regulatory approvals in China, will provide CX series on-highway transmissions to both Caterpillar and Fast Gear for global distribution.
About Fast Gear: Fast Gear, which is partially owned by Weichai Power Co., Ltd., is the largest Heavy Duty manual transmission manufacturer and supplier in China. With total assets of over 10 billion yuan ($1.53 billion U.S.), it has five production facilities, which are located in Xi'an, Baoji and Xianyang Cities respectively. With the integration of scientific research, development, manufacture and sales, the company annually makes and sells one million transmissions, 50 million sets of gears and 100,000 tons of auto forgings. The transmission products cover a full range of applications with models from 4-speeds to 20-speeds. In 2010, Fast Group surpassed 12.6 billion yuan ($1.92 billion U.S.) in both annual industrial output value and sales, the first one in the Chinese Gear Industry to earn over 10 billion of the two economic figures. Each economic index of Fast Group has ranked first in the Chinese Gear Industry for nine consecutive years, and the annual output and sales volume of Heavy Duty transmissions have leapt to first place in the world for five consecutive years. The "FAST" brand has become a well-known brand internationally.