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published: July 16, 2008
VANCOUVER, BC – Westport Innovations Inc. (TSX:WPT), a global leader in alternative fuel, low-emissions transportation technologies, announced today that it has reached a joint venture agreement with Weichai Power Co.,Ltd (HK:2338), China’s largest heavy duty engine manufacturer, and Hong Kong Peterson (CNG) Equipment Limited. The new entity, Weichai Westport Inc. (WWI), will research, develop, design, manufacture, market, distribute and sell advanced, alternative fuel engines (and relevant parts and kits) for use in automobiles, heavy duty trucks, power generation and shipping applications.
“We are working with the largest heavy duty engine manufacturer in China where over 450,000 Heavy Duty trucks are introduced onto Chinese highways every year,” said David Demers, CEO at Westport Innovations. “Our High Pressure Direct Injection (HPDI) LNG fuel system technology provides a clean, low-emission solution to address a burgeoning market opportunity and the pressing need in China and Asia to reduce high emissions in major cities. With over 11% of the global heavy duty engine market share, Weichai is not only a strong partner for the Chinese market, but a greater partner in global expansion of low-emission, alternative fuel engines.”
The rapid growth in China for energy, especially in the transport sector, is creating a strong demand for newer, cleaner fuels in China such as natural gas. China has a growing reserve of natural gas and is in various stages of reviewing and approving a number of new LNG import terminals to be constructed along its eastern shore. Transitioning natural gas from power generation to transportation frees up increasingly expensive oil based fuels for other applications and provides an economic advantage to the vehicle owner where natural gas is less expensive than diesel on a per unit of energy basis. According to The National Clean Vehicle Productivity Promotion in China, there are over 185,000 Natural Gas Vehicles(NGV) in China and the fueling infrastructure required to fuel these vehicles is growing quickly.
Adding to the scope of the joint venture, WWI will provide ancillary services including inventory, warehousing, training, applications engineering, sales promotion, technology consulting, instalment, maintenance and after sale service.
“As a leader in one of the world’s largest heavy duty truck markets, this partnership will help us expand into one of the fastest growing market segments with innovative, clean technology,” said Mr. Tan Xuguang, Chairman and CEO of Weichai Power. “Our proven ability to develop, manufacture and sell heavy duty engines combined with Westport’s ‘state of the art’ combustion technology will help launching a clean, low-emission heavy duty LNG fueled engine in China in the shortest possible time.”
Under the terms of the 30-year joint venture agreement, Westport’s initial investment is expected to be approximately US$4.5 million (30 million RMB) equaling a 35 per cent share. Weichai Power and Hong Kong Peterson will hold 40 per cent and 25 per cent shares respectively. Westport Innovations and Weichai Power will appoint two members each to the board of directors and Hong Kong Peterson will appoint one. The Chairman of the board will rotate between Weichai Power and Westport after each three-year term, with Weichai power appointing the first board chair.
Westport Innovations Inc. is a leading global supplier of proprietary solutions that allow engines to operate on clean-burning fuels such as compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen, and renewable natural gas (RNG) fuels such as landfill gas and help reduce greenhouse gas emissions (GHG). Westport technology offers advanced LNG fueling systems with direct injection natural gas engine technology for heavy-duty vehicles such as highway trucks and off-road applications such as mining and rail. Cummins Westport, our joint venture with Cummins Inc., designs, engineers and markets spark-ignited natural gas engines for medium- and heavy-duty transportation applications such as trucks and buses. Westport is also one of the global leaders for natural gas and liquefied petroleum gas (LPG) fuel system technology, design, and components in passenger cars, light-duty trucks and industrial applications such as forklifts. To learn more about our business, visit westport.com, subscribe to our RSS feed, or follow us on Twitter @WestportDotCom.
Weichai is the biggest powertrain manufacturer and owns the most integrated heavy-duty vehicle value chain in China, including the manufacturing of the engine, gearbox, axle, vehicle and other vehicle related parts. Weichai has over 1,000 models of advanced diesel engine products, which are widely used on heavy-duty trucks, large buses, construction machinery, marine vessels and power generation. Weichai reports a 36% share of Chinese heavy-duty vehicle market and more than 80% share of the over 5-ton construction machinery market. Weichai is one of the top engine suppliers in the world with annual sales of 300,000 engines. In particular, the WD series and WP Landking series of heavy-duty, high-speed engines developed and manufactured by Weichai are appreciated by consumers due to their high performance, reliability and economic benefits. Weichai Power is a public company listed on the Hongkong Stock Exchange and Shenzhen Stock Exchange in China. Weichai has more than 2,000 authorized maintenance centers among China, which supplies convenient and quick service for customers. Additional information can be found at www.weichai.com.