Aussie transmissions for London Taxi

CHINESE ownership of Australia’s Drivetrain Systems International (DSI) is opening major doors for the automatic transmission supplier, with a deal to export Albury-made rear-drive transmissions for Chinese-built London Taxis from next year.

As well, DSI’s Australian-designed front-drive transmissions are set to go into production at a new 300,000-unit-a-year factory being built in China by DSI parent company Geely Automobile Holdings for the Chinese market.

The taxi deal involves exports of the five-speed transmission for the Chinese version of the iconic, boxy ‘black cab’ whose original UK manufacturer, London Taxis International Vehicles (LTI), also has been taken over by China’s rapidly expanding Geely, which gobbled up Sweden’s Volvo AB earlier this year.

The transmission – to be built on the Albury production line that until recently made four-speed auto transmissions for some Ford Falcons – will replace a Jeep Cherokee unit that is still fitted to the British-built variant of the TX4 London Taxi made in Coventry, where it is matched with a 2.5-litre VM Motori four-cylinder diesel engine.

At this stage, DSI has no deal to supply the same transmission to the UK factory of LTI, but with Geely now in control of both DSI and LTI parent company Manganese Bronze Holdings PLC, that remains a possibility.

From top: Geely EC7, Geely GE and Geely Vision.

Geely signed a joint-venture deal with LTI in 2006 to make its cabs in China, but since then, the loss-making British company has progressively been bought out by its Chinese partner.

Geely showed its own, more rounded version of the London taxi, called Englon TXN, alongside a standard UK-design TX4 at the Beijing motor show in April.

DSI commercial manager for rear-wheel-drive transmissions Michael Gilchrist confirmed the London Taxi deal, adding that DSI’s Albury factory was also gearing up to supply front-drive automatic transmissions for the Korean-made SsangYong C200 compact SUV later this year.

These export and technology deals mark a significant turnaround for DSI, which was snapped up by Geely for $47.4 million in March last year after the Australian company fell into receivership when export orders to the bankrupt SsangYong Motors dried up at the height of the global financial crisis.

The purchase not only saved DSI and the jobs of its remaining 168 workers but gave Geely badly-needed access to modern automatic transmission technology.

That technology is now set to be employed on a vast scale at a new $A280 million factory being built in China by Geely to make DSI’s six-speed, front-drive automatic transmission for current and future Geely and Emgrand models, including a yet-to-be-released compact SUV, the EX7, and the Rolls-Royce-like GE luxury limo.

A ground-breaking ceremony for the new plant – the first to put DSI transmissions into production outside Australia – was held in June.

The Shandong Geely Transmission Co factory will make up to 300,000 transmissions a year for the fast-growing Geely, which is scheduled to start exporting cars to Australia this year.

Geely also says it can expand production at the Shandong factory, and has hinted that other plants might be on the cards, referring to plants – plural – in its media release, saying DSI “will set up plants in China also serving other Asia markets”.

Although Geely is one of the smaller Chinese motor companies, its domestic sales have grown from zero to 329,100 in little more than a decade. This year, Geely sales are up 41 per cent and on target to top 400,000 units.

It has made its own automatic transmission in small numbers since 2005, but this unit was not suitable for larger cars now coming down the production lines. Sales of these vehicles have been restricted because of the manual-only design in a country where automatic transmissions are enjoying rapidly-growing take-up, from just 25 per cent in 2005 to an expected 50 per cent in 2015.

The shortage of local auto transmission engineering and production skills in China is so acute that 2.28 million of the 2.3 million automatic transmission cars sold in China last year were fitted with units made by foreign companies or joint ventures.

“DSI technology helps to break the wall,” Geely said in a statement announcing the ground-breaking ceremony in Jining, Shandong Province, for the new factory that is expected to begin production before the end of the year.

Geely praised the DSI unit – designed for vehicles with 1.8-litre engines or bigger – saying it would help to cut fuel consumption while providing smoother operation and cost savings.

Geely said the “localisation” of DSI automatic transmission production signalled the official launch of Geely’s strategy of “going outside, joining the international competition, attracting foreign investment and global integration”.

Geely vice-president An Conghui said the top-selling Geely Vision – a small sedan with 1.8 and 1.5-litre engines – would be the first model to be equipped with the Australian-designed six-speeder this year, with eight other models to follow before 2011.

One of those is expected to be the EX7, a Toyota RAV4-sized compact SUV that has been spied in testing on Chinese roads recently.

Chinese news reports suggest the SUV will be powered by a choice of 1.8-litre petrol and 2.0-litre diesel engines, making it similar in concept to the SsangYong C200 that will also use the DSI transmission.

Another vehicle to get the DSI box is expected to be the Geely-built, Holden Cruze-sized Emgrand EC7, which has been earmarked for introduction to Australia late this year by Perth-based Geely importer Chinese Automotive Distributors. The Australian launch of the car has been delayed until the arrival of the automatic transmission version – essential for success in this market.

The EC7 sedan will be preceded on the Australian market by the Geely MK light car, which will be trialled first in Western Australia before the Geely brand is expended to the eastern states next year.

A 1.0-litre city car – called the Panda in China – is also on the list for the Australian Geely line-up.

While Volvo has joined the Geely camp after the Chinese company acquired it for $US1.8 billion ($A2.16b) from Ford Motor Company earlier this year, DSI has no immediate plans to export transmissions to the Swedish company.

Geely is expected to start building the Volvo S60 and XC60 at a new plant in China next year as it aims to sell about 150,000 Volvos in China by 2015.