Kawasaki Establishes Joint Venture to Produce General Purpose Gasoline Engines in China

Aug. 03, 2009

Kawasaki Establishes Joint Venture to Produce General Purpose Gasoline Engines in China

Tokyo, August 3, 2009 — Kawasaki Heavy Industries, Ltd. announced today that it has reached an agreement with Kwang Yang Motor Co., Ltd. (KYMCO) of Taiwan to establish a joint venture company, Changzhou Kawasaki and Kwang Yang Engine Co., Ltd., for the production and sales of general purpose gasoline engines. The agreement was signed yesterday.

Kawasaki has been consigning the production of its general purpose gasoline engines to KYMCO’s Chinese subsidiary, Changzhou Kwang Hsing Precise Machine Co., Ltd., since November 2008.

The new joint venture company will construct an engine factory in the Changzhou National Hi-tech District. Scheduled to go online in January 2010, the factory will have an initial production capacity of approximately 200,000 units per year. The two-stroke engines and four-stroke single cylinder engines the factory produces will be sold to original equipment manufacturers via Kawasaki’s sales networks in Japan, Europe, the U.S. and elsewhere.

The new company is positioned as Kawasaki’s third production base for general purpose gasoline engines following those in Japan and the U.S. The joint venture will enable Kawasaki to build an even stronger production foundation designed to meet a diverse range of customer needs.

Overview of Joint Venture

1. Company Name: Changzhou Kawasaki and Kwang Yang Engine Co., Ltd.
2. Location: Changzhou, Jiangsu Province, the People’s Republic of China
3. Capital: USD5 million (JPY475 million*)
4. Capital Ratio: 50% Kawasaki Heavy Industries, Ltd.
50% Kwang Yang Holdings Limited
(KYMCO’s wholly owned subsidiary)
5. Description of business: Production and sales of general purpose gasoline engines and parts
6. Production Capacity: Approximately 200,000 units/year

(Increasing to 1 million units/year in five years)

*Calculated at 95 yen to the U.S. dollar