Vehicle component maker Luxshare Precision announced on February 11 that it has signed a strategic cooperation framework agreement with Chery Group, including plans to form a joint venture with Chery New Energy for the development and manufacturing of new energy vehicles (NEVs). The joint venture will also provide Luxshare’s core automotive components business with cutting-edge R&D design and mass production platforms.
Shenzhen-listed Luxshare Precision received a large number of telephone surveys from various institutions last Sunday. It said that in this strategic cooperation with Chery, the company did not build cars by itself, but cooperated with Chery to develop the original design manufacturer (ODM) model.
Luxshare Precision said it has always sought to become a leading vehicle component manufacturer in the automotive field, and has been looking for a platform that can test its products’ performances. This strategic cooperation with Chery will rapidly improve its products’ performance on the basis of building an ODM model.
At present, a project related to the ODM business has been achieved, to be put into production in the next 12-18 months. Luxshare said it would take the business of foreign traditional car companies and new smart EV brands in China as the joint venture’s core development direction.
The joint venture will be led by Chery, which brings years of experiences in making vehicles, while Luxshare will provide support in terms of overall business and customers.
In terms of the source of funding for the joint venture’s development, Luxshare pointed out that funds needed by the ODM model in the Chinese market can be met based on Chery’s existing production platform and Chery New Energy’s plan in the future. Luxshare’s major investment will focus on the ODM model in the overseas market.