China's Geely buys bankrupt Australian parts maker

27 March 2009

Chinese automobile manufacturer Geely Automobile Holdings Ltd said it has signed an agreement to buy troubled Australian car parts maker Drivetrain Systems International Pty Ltd.

Drivetrain Systems, a supplier to Ford Motor Co, Chrysler, and South Korea's Ssangyong Motor Corp, mostly produces four-speed and six-speed automatic transmissions with an annual output of 180,000 units. It filed for bankruptcy protection in February after "some of its clients were severely impacted by the financial crisis," Geely said in a statement.

Executives of both companies attended the signing ceremony held at the government house of New South Wales, Australia.

The company did not provide any financial details of the deal, and only said it had the support of both the Australian and Chinese governments.

Under the deal, Geely Auto will provide the much-needed fund support to Drivetrain Systems to help it resume normal business operation and expand R&D activities.

The purchase will strengthen the Chinese auto maker's gearbox production line, and improve production and engineering capabilities for its own automatic transmissions, Geely said.