EcoMotors forms second China joint venture

UPDATED: 3/5/14 3:05 pm ET - adds detail

DETROIT (Reuters) -- EcoMotors, a Michigan-based engine maker backed by Microsoft Corp. founder Bill Gates and venture capitalist Vinod Khosla, has formed a joint venture in China with a subsidiary of First Auto Works.

The FAW subsidiary, First Auto Works Jingye Engine Company, is investing more than $200 million in the venture, BEM Shanxi Co., which aims to begin building an advanced engine designed by EcoMotors in 2015 in China's Shanxi province.

"For customers in China, it will ultimately provide access to affordable technology that will have a positive influence on the country's transportation emissions," Amit Soman, EcoMotor's president and chief operating officer, said in a statement.

FAW's manufacturing partners in China include Volkswagen AG, Toyota Motor Corp. and General Motors Co.

It is the second China venture for EcoMotors, a suburban Detroit startup, which announced a similar deal last April with China's Zhongding Power.

Don Runkle, a former executive at General Motors and Delphi, stepped down as EcoMotors’ CEO in August 2013 but is still on the board.

The privately held Chinese firm plans to ramp up production this year in Anhui province, supplying engines for use in commercial and off-road vehicles.

Both China ventures will build EcoMotors' OPOC engine, which is more compact than conventional gas and diesel engines of similar power. It is also said to be cheaper and to deliver higher fuel economy and fewer emissions.

Braemer Energy Ventures is also an investor in EcoMotors, which was founded in 2008.



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