Shanghai (ZXZC)- JAC and Cummins Sales and Service Singapore Pte., Ltd. (hereinafter referred to as Cummins) signed a contract on May 14 to set up a new engine factory, which is likely to be named as JAC Cummins Engine Co., Ltd. 

On July 4, 2012, JAC and Navistar set up a 50:50 JV called JAC Navistar. Now Navistar desired to pull out the JAC Navistar and intends to transfer the 50% share of JAC Navistar to Cummins. 

Therefore, JAC Navistar will be reorganized and then changed into a new JV with a capital form of 50:50. The new JV's registered capital will still be RMB 600 million. Both parties agreed that JAC Navistar's name will be changed as JAC Cummins Engine Co., Ltd., after the equity transfer. By virtue of the new JV's platforms, JAC can realize emission upgrade and performance optimization for light-emission and medium-emission engines, thus the value of the complete vehicles can be entirely improved. 

According to the released statement, the new JV will specialize in researching & developing, designing, testing, manufacturing, assembling, promoting, marketing, importing and exporting diesel engine and its parts, and will also offer aftersales parts and services as well as the leasing of factory and equipment. 

It is expected that the new JV will reach an annual production capacity of 250,000 engines after the JV starts production. The JV will manufacture engines in accordance with the business plan and budget approved by board of directors annually.