Geely Holdings, China's largest private car maker, held a foundation-laying ceremony for its transmission plant on June 6 in Jining, Shandong province.

The ceremony marked the localization of the world's second largest private transmission company- Drivetrain Systems International (DSL) acquired by Geely in 2009, signaling the official launch of Geely's strategy of "going outside, joining the International competition, attracting foreign investment and global integration."

File photo: Geely Holdings, China's largest private car maker, held a foundation-laying ceremony for its transmission plant on June 6 in Jining, Shandong province.

Filling in gaps for Chinese AT technology

Automatic transmission (AT) decides power, economy and car amenity. According to statistics from 2005-2008, among sales of passenger cars in China, the number of auto-transmission cars increased from one million to 2.3 million with market coverage increasing from 25 to 40 percent. It is predicted that by 2015, the number will be 4.5 million with the market coverage at 50 percent. Meanwhile, the need for highly fuel-efficient automatic transmission becomes more apparent when considering factors like fuel economy.

On the one hand, the market has a great demand for automatic transmission as it develops in such a rapid developing speed, while on the other hand, Chinese enterprises are not qualified enough for AT technology for passenger cars. Data shows that in 2008, 2.28 million automatic-transmission cars out of 2.3 million were manufactured by foreign companies or joint ventures (JV), which demonstrates that foreign AT technology possesses a monopoly position in China and Chinese customers were paying for it. Technological monopoly led to high price and high limitations, which blocked the development of Chinese AT technology and factitiously raised prices of AT cars.

DSI technology helps to break the wall

As one of the earliest auto makers dedicated to the development of AT technology, in May 2005, Geely JL-Z automatic transmission series were loaded to cars, which achieved a breakthrough for Chinese auto makers. In fact, in 2008, almost all the 20,000 AT cars sold in China came from Geely.

In 2009, Geely, with the very lighting speed acquired DSI. DSI with ability of design, development and product industrialization and over 80 years' history, has currently produced a world-leading AT system. DSI has cooperated with Australian Ford for 30 years and is also a partner of Geely Englon TX4, Indian M&M, Korean SsangYong Motors as well as customers from Russia.

"AT technology has always been a barrier for Chinese auto makers, Car models loaded with advanced AT are so rare and the cost is high. By acquiring DSI, the cost can be reduced while competitiveness for Geely will be upgraded. It is not only good for Geely, but also beneficial for DSI, whose biggest customer is Geely," said Zhang Xiaoyu, chairman of Society of Automotive Engineers of China (SAE-China).

Speed up to digest DSI technology

It is reported that equipped with 1.6 billion yuan, Shandong Geely Transmission Co. will produce 300,000 AT per year. The manufacturing technology will be improved by Geely according to domestic need. The company will initially produce AT with high torque of 6, which can be used for cars with engines above 1.8 litres or SUVs. This type of AT has higher fuel-oil efficiency, faster reaction and apparent driving amenity compared with current Chinese AT. The project is expected to become an important economic pillar for the local government and provide 400 jobs directly after completion.

According to Geely, the AT project meets government requirements on resources disposition and use, structural adjustment, energy conservation and environmental protection. The automatic transmissions to be produced possesses leading technology and can adapt to the market easily. As Jining company starts operation, the plant will provide Geely and other domestic automakers with 6 models of AT, thus domestic market's dependence on foreign products will be fundamentally changed.

"By the end of this year, Geely Vision will be the first to experience the new AT. And following will be Geely Emgrand, MBH's London Taxi, SUV and EC8 series. Before the beginning of 2011, all Geely's 9 types of cars will be loaded with this new technology," said An Conghui, vice president of Geely.