Chinese carmaker Chery Automobile has set up a joint venture with Quantum LLC, a U.S. subsidiary of Tel Aviv-listed Israel Corp, in its attempt to explore the European and U.S. markets.

The joint venture, Chery Quantum Automobile, has registered at the administration of industry and commerce in east China's Anhui Province, sources from Chery said.

Quantum LLC spent 225 million U.S. dollars for a 45 percent stake in the new entity, while Chery provided mainly technology and land to get a controlling 55 percent. The two parties planned a total investment of 1.5 billion U.S. dollars into the joint venture, which would be the biggest joint venture in Anhui.

A Chery official said it is the first time for a Chinese automaker to provide technology, rather than direct financial investments, to form a joint venture with a foreign company.

Chery Quantum Automobile is expected to start production in 2009 and aims to produce 150,000 vehicles a year.

Chery's vehicle sales are forecast to reach a record 480,000 units this year, after rising 24.8 percent year on year to 381,000 units in 2007. The company remained the country's fourth largest automobile seller in 2007.

Its subcompact model QQ, known as the "Chinese Beetle", will launch three new models this year.

The 11-year-old company, based in the city of Wuhu, plans to raise its annual output to one million vehicles by 2010.

Its exports, which jumped 132 percent to 119,800 units in 2007, were expected to rise to 180,000 this year.

The flag-bearer of Chinese indigenous brands has accelerated its expansion overseas in recent years, with its exports topping all other domestic rivals for five consecutive years.

(Xinhua News Agency February 11, 2008)