Immediate: 9 November 2009

Antonov Chinese joint venture formally incorporated - new manufacturing facility now underway to build TX6 automatic transmission - partnership a key step to Landai becoming the largest supplier of transmissions in China

Antonov, the UK-based vehicle transmission specialist, has informed shareholders that the formal incorporation of its joint venture company in China with Chonqing Landai Industry Co Ltd, for the production of the Antonov TX6 automatic transmission, has been completed and a certificate of incorporation has been issued by the Chinese authorities.

Antonov's initial investment in the joint venture is €2.5 million, of which €375,000 is payable within 90 days of the incorporation with the balance to be paid within two years.  The company expects that this will be met through its €15 million loan facility with Quivest announced on 19 February 2009.

Landai is in the process of building a new manufacturing facility for its existing operations at its new site in Chongqing and part of this new facility will now be allocated for the production of the TX6, which is expected to commence in Q4 of 2011.  Once completed, production capacity is expected to equal approximately 200,000 units per year.   Antonov andLandai, meanwhile, are working closely together to market the transmission to car manufacturers in China. 

Antonov and Landai are also in the process of finalising various agreements in relation to the joint venture, including the license agreement, under which the joint venture will manufacture the TX6, and the engineering services agreement, under which Antonov will provide support to the joint venture in moving the TX6 into mass production.  Both these two agreements are expected to be signed in December 2009. 

All technical targets for the TX6 were achieved in 2008, including shift quality and drive comfort, noise, efficiency and fuel consumption, as well as manufacturing feasibility.  This year has seen the finalising of the key parameters of the production design of the TX6, one of which is its compact transverse length of 320mm, making it suitable for smaller vehicles as well as mid size cars.

The intention is that initially approximately 60 per cent of the production components for the TX6 will be manufactured by Landai, increasing to higher levels in the years to follow.  Antonov has also selected Conti Temic Microelectronic GmbH for the development and implementation of control software for the TX6 as well as for the delivery of the production Transmission Control Unit or TCU.  Antonov is currently in negotiations with a potential supplier of hydraulic blocks for the TX6.

Commenting on the incorporation of the joint venture, Dr Jos Haag, Antonov’s chairman and chief executive, said in its London Stock Exchange announcement issued on 6 November 2009: 

“Today marks an important step in Antonov's strategy to produce and distribute the TX6 in China.  Production of front-wheel drive vehicles in China with transversely mounted engines up to 270Nm torque is forecast to exceed 1.8 million vehicles in 2012 and the TX6 offers a competitive proposition for manufacturers in this market segment.”

“There is still further work to be done to bring the TX6 into mass production, but I would like to thank Landai and COFTEC, a governmental body in the Chongqing province, for their support to date and I look forward to working with them in the future.” 

Antonov announced on 6 May 2009 the progress it was making in its efforts to form a joint venture in China to manufacture and market its proprietary TX6 transmission, with the signing of a letter of intent between Chongqing Landai Industry Co Ltd and Antonov at a ceremony attended by leaders of the Bishan County and Chongqing provincial governments.

Antonov believes Landai is an excellent lead partner for the joint venture, delivering the core capabilities of broad market access, mass production knowledge and transmissions technology experience.  Landai employs 1,400 people in the Chong Qing province, and has a well established customer base among Chinese vehicle manufacturers including Geely, Chery, Lifan, YuAn and FAW.  It also has established long term partnerships with companies in Iran, India and Korea.  

Mr. Zhu Tangfu, chairman of Landai, commented at the time: “The partnership with Antonov is a key step for Landai to become the largest supplier of transmissions in China.”

Antonov’s trading activities in China, under the management of Dr Yun Kang, are driven through its office in Chong Qing, from where the company can demonstrate its 6-speed transmission technology to prospective automotive clients.  Six-speed automatic transmissions are much desired by Chinese motorists, but currently have to be imported by the domestic carmakers. 

The major innovation in Antonov’s all-new TX6 gearbox is the elimination of the traditional torque converter in a planetary transmission, thereby bringing the efficiency of an automatic gearbox much closer to that of a manual transmission.   The TX6 design avoids the high capital investment as well as the cost, complexity and development issues associated with twin-clutch automated manual transmissions and uses components similar to those of current production automatics.  Antonov’s innovative combination of planetary gears and parallel transfers of power also reduces the cost, weight and size of the gearbox, whilst improving mechanical efficiency, as well as retaining the virtually seamless gearshifts of an automatic transmission.  In addition, the TX6 offers car makers low development costs and, if required, the ease of introducing it into relatively low volume production.  The transmission is protected by worldwide patents.   

Further information on Antonov is available at www.antonovplc.com, while further information on Landai is available at http://en.cqld.com. 

Automotive media contact:
Rob Palmer on 01582 763255 or 07768 242761 or email: rpalmer@palmerpr.com.  Previous press releases on the TX6 transmission and pictures can be downloaded from www.newspress.co.uk