Geely looks to IP boost in London cab maker deal

Updated: 2013-03-06 07:52

By Hao Nan (China Daily)

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Geely looks to IP boost in London cab maker deal

Geely's exhibition stand at the Shanghai auto show stressed its improving quality. The company now has over 8,000 patents. Shao Chang / For China Daily

Following its acquisition of Swedish luxury vehicle brand Volvo two years ago, Geely Group has made another strategic transaction that analysts say will bring benefits from intellectual property rights.

Zhejiang-based Geely recently announced it bought Manganese Bronze Holdings, manufacturer of the iconic London black cab, for 11.04 million pounds ($16.7 million), China Intellectual Property News reported.

The acquisition covers all business and core assets of MBH including patents and trademarks as well as a manufacturing plant and equipment.

It also includes MBH's stock of unsold vehicles, according to the announcement.

Geely said it will rebuild the globally known brand while gaining a more robust foundation for technological innovation and brand promotion through MBH's patented technologies.

"I am delighted that Geely has successfully secured the future of the London Taxi Company, ensuring the continuing manufacture of a world famous, fully accessible and instantly recognizable vehicle synonymous with London," Boris Johnson, the city's mayor, told Xinhua News Agency.

After the acquisition, Geely said innovations will focus on research and development of "green" and mid-size cars.

Geely is now a patent giant in China's auto industry with about 14,000 Chinese and international applications, more than 8,000 of which have been granted.

Geely's takeover of Volvo also enlarged the company's patent inventory for safety and environmental protection technologies.

The wide range of intellectual property rings is fueling the company's rapid growth, said Geely.

But it is not the first Chinese carmaker to value IP in an overseas acquisition.

In 2009, Beijing Automotive Industry Holdings Co bought the IP assets of Saab Automobile for $200 million, including whole-vehicle and parts design standards, turbocharged engine designs, gearbox technologies, and test measures and standards.

BAIC brought the assets back to China on two 1,000-gigabyte hard disks and paper documents weighing 3.5 tons.

Overseas mergers and acquisitions in China's auto industry have increased in recent years, and all have a common core value - continuously rising attention to IP, said industry insiders.

Merger and acquisition experts said it illustrates improvements in the capacity of local automakers as well as the quickening pace of the nation's "going-out" policy of international acquisitions.

"To learn, digest and absorb the world's advanced technologies is an urgent need for Chinese vehicle producers," said Huang Yonghe, an expert at the China Association of Automobile Manufacturers

"China's automakers lag behind their foreign competitors in technological accumulation, so transactions of IP assets is a very good way of narrowing the gap," he added.