Chery Automobile, which wants to expand beyond small economy cars, received final government approval yesterday to form a joint venture with an Israeli firm to build larger, more profitable vehicles.
The National Development and Reform Commission yesterday approved Chery's bid to form a joint venture with Israel Corp's US-based unit, Quantum, to produce 150,000 vehicles annually.
The joint venture will make passenger cars and sport-utility vehicles for the domestic and overseas markets, said the NDRC on its website.
Anhui-based Chery, the maker of the popular economy car QQ, first announced the 5.8 billion yuan joint venture in May last year.
Quantum will invest US$225 million for a 45 per cent stake in the venture, while Chery will hold the remaining 55 per cent.
'The venture has no plans to export sedans to the US market,' said Jin Yibo, the administration office director of Chery. South America is likely to be the first market.