BOUCHERVILLE – Hydro-Québec subsidiary TM4 is launching a joint venture with a Chinese manufacturer to develop and build electric buses and trucks for the Asian market.
The venture, which has the earmarks of a game-changer for TM4, involves Prestolite Electric Beijing Ltd. (PEBL), which employs 1,300 people and, in 2011, saw gross sales top $170 million U.S.
“We believe this partnership will be a significant driver in the development of electric transportation in China, ” said Charles Tse, PEBL’s director and board member.
The first prototypes are expected in May, Tse said. Deliveries to the first customers are slated for 2013.
As for TM4, which has been receiving $8 million to $10 million from Hydro-Québec for over a decade, the prospects seem rosy.
“It’s of very, very great value for us, firstly because of the commercial potential of the joint enterprise we have formed with PEBL,” TM4 CEO Claude Dumas said in a telephone interview from Beijing.
And if successful, the alliance will showcase TM4’s wares and expertise to a wider world.
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“The gain in credibility will be tremendous,” said Dumas whose company is among the firms working on a made-in-Quebec electric bus whose prototype has been promised before the end of 2013.
A signing ceremony for the Quebec-China deal is to take place Thursday in China, where Prime Minister Harper is on a state visit.
The 50-50 venture has exclusive rights for 39 years to TM4 technology for heavy vehicles in Asia.
TM4’s fortunes had been linked to its key client, India-based Tata Motors, which is using TM4 technology in its Indicia Vista EV, an all-electric vehicle undergoing testing in the U.K.
The new company, Prestolite E-Propulsion Systems (Beijing) Ltd., will focus on “developing, manufacturing, selling and supporting electric traction systems for trucks and buses, as well as commercial, off-road and marine vehicles,” reporters were told.
The new venture will target clients in the People’s Republic of China, Taiwan, Hong Kong, Macao, Indonesia, Philippines, Thailand, Singapore and other members of the Association of South East Asian Nations.
Until a facility is built in China, work on the venture will be done at TM4’s facility, Tse said.
By 2014, “if everything goes well,” production could be “in the thousands,” he said.
Both Dumas and Tse said that TM4 trumped competitors for the deal. Financial details weren’t disclosed.
Dumas and other TM4 executives have made several trips to China in recent years and were part of the 2011 Quebec trade mission.
“The sheer size of the market covered by the (agreement) and the huge presence of PEBL in this market makes us very happy to be chosen,” Dumas said.
China accounted for 40 per cent of the world’s production of heavy-duty buses in 2010, according to the Organization of Motor Vehicle Manufacturers.
And PEBL products are found in 85 per cent of the medium and large buses and 38 per cent of the heavy duty trucks made in China.
PEBL is an offshoot of U.S.-based Prestolite Electric Inc. Its footprint in Asia includes 23 offices, 31 distributors and more than 170 service points. The heavy-vehicle market offers better profits than the car market, Dumas noted.
“We hope to have better margins in this market segment than the market we can envision in the passenger vehicles,” he said.
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