Loncin currently manufactures 1.5 million motorcycles per annum and over three million engines for domestic use and export. It supplies components to domestic and major western automotive brands.
The companies will work closely together and will each provide €1.2m to fund marketing activities and the production of prototype demonstration vehicles.
The companies will discuss forming a joint manufacturing venture during 2008, dependent on the success of the pilot project and on reaching mutually agreeable commercial terms.
This agreement is said to support Antonov’s evolving commercial strategy towards direct involvement in the application of its technology. This will enable Antonov to maintain closer control over its intellectual property rights in order to reduce risk and generate better returns compared with a pure licensing business model.
John Moore, CEO of Antonov, commented: ‘This agreement with Loncin provides a second route to market for our technology within the significant Chinese market place. We look forward to working closely with Loncin on the pilot project and possibly to a more formal relationship. I will update shareholders on further progress in due course.’
Loncin’s Chairman, Mr Tu Jianhua, commented: ‘At the moment, all automatic transmissions used within our industry are imported. We believe that our engine manufacturing experience in partnership with the unique resources provided by Antonov provide significant opportunities to address a major market for Chinese produced automatic transmissions.’