Chairman of BAIC Xu Heyi (front left) andSiemens Industry Sector CEO Siegfried Russwurm (front right) shake hands after signing the joint venture agree ment in Beijing during the on-going 2014 Beijing Internaional Automotive Exhibition. [Liu Zheng / chinadaily.com.cn]

Siemens and BAIC will join hands to further expandgreen auto motive technologies in the Chinese market. The two companies plan to set up a joint venture this year to produce highly efficient motors and inverters for hybrid and batteryelectric vehicles.

Beijing Siemens Automotive E-Drive System Co, the joint venture, will begin manufacturing the prototype and small volume production in 2014, and the mas s production will start in 2015 in a new Beijing-based factory. The venture plans to produce more than 100,000 units per year with upside potential.

"This cooperation will further strengthen our leading position in highly efficient drive technologies," said Siegfried Russwurm, CEO of Siemens Industry Sector.

Siemens AG, a global player in the field of electric drivetrains and Beijing Automotive Industry Holding Co (BAIC), one of the major Chinese carmakers, signed the joint venture agreement at the 2014 Beijing International Automotive Exhibition during the media day on Sunday.

BAIC holds 40 percent share in the new joint venture, and Siemens 60 percent through Siemens AG and Siemens International Trading (Shanghai) Co equally holding 30 percent each.

Both parties outlined their plan to utilize Siemens' electric drive train components in BAIC'selectric car platforms for a range of vehicles, including its S, C and L car series. The performance scale of these models ranges from 45 to 200 kW.

Xu Heyi, Chairman of BAIC, said: "We will developnew energy car s via integrated global resources and continuous open and integrated innovation. This cooperation will bring the technology of BAIC's new energy car products to the next level."

The joint venture will manufacture components for the electric drivetrain, including power-electronics and electric motors. The new electric drivetrains consist of a safer and higher power density inverters and highly energy efficient motors.

"The change from conventional drive to electrification will be done via plug-in hybrid," Joerg Grotendorst, CEO of Inside e-car with in the Drive Technologies Division in Siemens AG.

"The high efficient components will not only be for pure electric vehicles, but forhybrid vehicle s as well," said Russwurm.

Through EV technology and manufacturing, the joint venture will contribute to Chinese government's initiative to establish higher environmental standards by pushingnew energy vehicle technologies.

"We really do believe in the new energy vehicle future, not only in China, but worldwide," sadi Grotendorst.

In fiscal year 2013 (Oct 1, 2012 - Sept 30, 2013), Siemens generated revenue of 6.14 billion eu ros in China. Siemens Industry Sector in China has eight R&D centers, 18 operating companies and 41 sales offices in China.

BAIC Group in 2013 sold about two million units of vehicles, with sales revenue of 266 billion yuan, and profit of 16 billion yuan.