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Raba plans joint venture in China

BUDAPEST, Sept 23 (Reuters) - Hungarian commercial vehicle maker Raba said on Tuesday it signed a memorandum of understanding with Chinese automotive firms to set up a joint venture in China.

Raba said it had identified potential venture partners in bus and truck axle production, but did not name the Chinese firms. Nor did it give any financial details or timetable for signing up to any joint venture.

"A joint venture with Chinese partners means a significant competitive advantage as it can meet the Chinese market's low price expectations through cost-effective local resources and lower purchase and transport costs," Raba said in a statement.

In the first half of 2003, Raba posted a net loss of 3.3 billion forints ($14.84 million) on sales of 14.57 billion against a net profit of 411 million forints on sales of 21.3 billion in the first half of 2002.

In July, Raba's newly appointed CEO Istvan Pinter announced a string of streamlining measures aimed at bringing the company back to at least a breakeven level by the end of this year.

He also said Raba would focus on China and Russia, in addition to its core markets in the United States and Western Europe.

Raba shares were up five forints, or 0.54 percent, at 925 forints at 0834 GMT, while Budapest's BUX index was down 0.45 percent.