Beijing-based Beiqi Foton Motor Co, the world's biggest commercial vehicle maker by sales last year, founded an international alliance on Aug 28, the most recent move by industry giants to grasp the anticipated boom in new energy vehicles.

Its partners in the venture are also leaders in their fields. Global computer icon IBM will join the venture along with Aecom, one of the largest environmental, planning and design companies in the US and Eaton Corp, a global leader in electrical power components.

The agreement follows another recently founded venture between Beiqi Foton and CITIC Guoan MGL, a domestic lithium battery maker with full self-developed intellectual property rights.

The moves are seen as part of Beiqi Foton's strategy to greatly expand its presence in the new energy vehicle market, according to local media reports.

The company began research and development in new energy vehicles after starting an automotive design and manufacturing center in 2008. It now has the capacity to make more than 10,000 hybrid and pure electric vehicles annually.

Beiqi Foton has to date sold 1,250 hybrid buses, 220 pure electric buses and 24 Oumake fully electric street-cleaning vehicles.

Another coalition

The international alliance was the second new energy coalition established in China in just 10 days.

On Aug 18, 16 State-owned enterprises including major domestic carmakers and energy giants formed a new energy vehicle consortium led by the State-owned Assets Supervision and Administration Commission.

Although it is seen as a signal of the country's commitment to the emerging new energy vehicle market, "the consortium is limited to entities with State-owned assets, so companies without such backgrounds cannot join", said Zhang Xin, auto analyst at Guotai Jun'an Securities.

But neither recently formed group is the first.

The country's top 10 domestic carmakers including SAIC, FAW, Dongfeng Motors, Changan Motors, Guangzhou Automotive and Beijing Automotive - parent of Beiqi Foton - jointly established an electric vehicle industry alliance over a year ago and made guidelines for future development.

Foton's ambition

Different from the State-owned or top 10 alliance, Beiqi Foton's tie-up is with overseas partners, showing its ambition to further expand globally.

On the same day it announced the international coalition, Beiqi Foton released its plan for the next decade, when it aims to sell more that 4 million vehicles worldwide

The commercial vehicle giant also said it will enter the passenger vehicle market by developing new energy automobiles.

Local media cited Zhang Yanlin, research director of China Investment Consulting, saying Beiqi Foton's alliance will not play an important role if the company fails to make breakthrough in new energy passenger vehicle market.

The company said it plans to produce and sell 11,500 new energy vehicles this year.

(China Daily September 6, 2010)