Geely Luo You Engine Company, a subsidiary of Geely Auto Holding, is to establish a new joint venture with Aisin for the production of six-speed automatic gearboxes, parts and sales. The initial plan is to produce 400,000 units per year.

Under the agreement framework, the JV will have a registered capital of US$117 million, with the transmission specialist injecting US$70 million for a 60% share. Geely will invest US$46.80 million for the remaining 40% stake.

With the launch of Geely’s ‘2020 Strategy’ and ‘Blue Geely Initiative’ core strategies, the Chinese carmaker is seeing greater need for automatic transmissions that offer six gears or more, with its own capacity for gearbox production not being able to keep up with demand. The JV with Aisin will lower purchasing costs and raise efficiency, Geely says.

“By establishing this new joint venture with Aisin we will be able to raise Geely’s core competencies in powertrain development and production, and accelerate our 2020 Strategy and Blue Geely Initiative. From today both parties will be able to work together on technology development and application to create a long term strategic partnership,” said Geely Auto Group president and CEO, An Conghui.

An was speaking at the 2018 Beijing International Auto Show, where the Hangzhou-based carmaker revealed the Concept Icon SUV and hybrid versions of its Bo Rui flagship sedan.