Yuchai enters strategic engine-making agreement in Vietnam

China Yuchai International Limited, a powertrain solution manufacturer through its main operating subsidiary in China, Guangxi Yuchai Machinery Company Limited (Yuchai), announced that Yuchai has entered into a strategic cooperation agreement with Kim Long Motor Hue, a subsidiary of Vietnam’s Futa Group. The agreement includes the provision of technology licenses, component supply and services to build an engine factory at Kim Long Motor’s site in Vietnam.

Yuchai has granted Kim Long Motor the technology licensing rights for certain model engine series that will be manufactured primarily for trucks, buses and other commercial vehicles in Vietnam. Kim Long Motor will have exclusive sales rights for the licensed engines in the Vietnam market, Yuchai said, along with priority sales rights in other Association of Southeast Asian Nations (ASEAN) countries and South Korea. Kim Long Motor will also have aftermarket service rights in these countries. The licenses are valid for 15 years, with total licensing fees of US$28 million.

Yuchai said it will support the construction of the engine factory in Vietnam by providing technical services for equipment installation and commissioning at Kim Long Motor’s expense. Yuchai will also supply all engine assembly parts and service kits for these engines manufactured by Kim Long Motor in Vietnam.