Sumitomo Corporation to invest in the world’s largest trailer manufacturer in China

Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President: Kuniharu Nakamura; hereinafter,“Sumitomo”) will invest 1.2 billion yen in CIMC Vehicles (Group) Co., Ltd. (Head Office: Shenzhen, Guangdong, China; President: David Li ;hereinafter,“CIMC Vehicles”), the world’s largest trailer manufacturer, by purchasing shares to be newly issued. The two companies have signed a joint-venture agreement that includes the aforementioned capital contribution.

CIMC Vehicles manufactures and sells industrial special-purpose vehicles, such as trailers, mainly in China, North America, Europe and Australia. The company is particularly strong in semitrailers, boasting the world’s top position with a 10 percent global share. For fiscal 2015, it expects to sell a total of more than 120,000 units. Establishing a next-generation-type largely computerized plant, the enterprise is actively working to boost its competitiveness through reduced cost and improved quality, with an aim to expand its presence in emerging markets in Southeast Asia, the Middle East and Africa.

Prior to this agreement, Sumitomo Corporation has already developed business in these emerging regions to sell vehicles manufactured by Japanese automakers. The new partnership was formed with a primary focus on these locations, seeking to capitalize on an expected rise in logistics demand driven by economic growth. Sumitomo and CIMC Vehicles will bring together their respective strengths to increase sales of semitrailers and other road transport vehicles. In addition, the two parties will cooperate to launch related projects, utilizing Sumitomo’s insights for engaging in auto parts manufacturing and automotive retail financing with a view to building effective value chains and creating new value.     

The business engagement between Sumitomo and CIMC dates back to the 1990s, when Sumitomo began to import and sell in Japan products of China International Marine Containers (Group) Co., Ltd. (“CIMC Group”), the parent company of CIMC Vehicles and the world’s largest container manufacturer, while supplying steel and other materials to CIMC Group. The solid relationship of trust forged over a quarter century of reciprocal business serves as a foundation for the herein announced capital contribution to CIMC Vehicles. Sumitomo also expects an additional benefit from the new partnership, namely, increased business opportunities with the Chinese conglomerate embracing member units undertaking energy-related projects, offshore platform construction and others, which will amplify the synergistic effects to encompass more organizations across the company. Going forward, Sumitomo will enhance the strategic partnership with CIMC Group with a view to considering the potential for developing collaborations in other areas.