Sinotruk Inks Restructuring Deal With Datong Gear

Shanghai, November 21, 2008: (Gasgoo.com) On Nov.18, China National Heavy Duty Truck Group Corp (Sinotruk) signed an agreement with Shanxi Datong Gear Group Co on strategic restructuring, Shanxi Youth Daily reported.

Sinotruk, the flagship of China's heavy-duty truck manufacturing industry, is expected to produce and sell 115,000 trucks this year with sales revenue to reach 50 billion yuan ($7.3billion). However, the heavy truck giant begins to see limited space for development as it has failed to form its own production base on engine and transmission, while the Shanxi-based Datong Gear Group is accomplished in transmission and gear production.

The cooperation between the two companies will solve the components shortage problems faced by Sinotruk and will also open up sales network for Datong Gear, Ma Anquan, a Datong executive said.

In the coming 5 years, Sinotruk will need 250,000 transmissions for its heavy duty trucks, 150,000 of which will be provided by the restructured Datong Gear and the rest will be made by Sinotruk itself.

The sales revenue created by the new Datong Gear Group is expected to reach up to 5 billion yuan in the coming five years and even climb to 10 billion yuan within seven years, the official said confidently.

Shanxi Datong Gear Group. Co. Ltd, one of the leading automotive components suppliers in China, specializes in manufacturing commercial vehicle transmissions and engine timing gears. Transmissions produced by Datong Gear supply for more than ten domestic automakers such as Dongfeng Motor, FAW, and Sinotruk and are also exported to countries like Iran, India and Russia.

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