Geely sets up joint ventures

Geely Automobile Holdings, the Hong Kong-listed unit of China’s biggest privately owned automaker, said it will invest 181 million yuan (22.63 million US dollars) to set up two joint ventures to produce auto aprts and after-sales services in the Mainland respectively, The Standard reported. The ventures will be financed from internal resources and the total investment will be about 1.13 billion yuan (141 million US dollars), the company said. Geely said earlier that upgrading and expanding production facilities remains a medium- to long-term target, and the two ventures could further allow the company to capitalize on the robust growth in demand for sedans in China. The two ventures will engage in research, production, marketing and sales of sedan-related components and also after-sales service. "The joint ventures are like assets restructuring, to re-allocate assets to companies which could enjoy lower tax rates in a bid to reduce the group's tax burden as a whole," said Alex Fan, an analyst at Daiwa Institute of Research.