THE WALL STREET JOURNAL: Shell, Shanghai Auto To Launch Jiffy Lube JV: “The joint venture will be called Anji Jiffy Lube Automotive Services Co. and Shell will partner Shanghai Automotive Industry Sales Corp., a unit of Shanghai Automotive Group Co., to launch the shops.” (ShellNews.net) 18 April 05
DOW JONES NEWSWIRES
April 18, 2005 12:21 a.m.
SHANGHAI -- Royal Dutch/Shell Group (RD, SC) said Monday it plans to launch a car-maintenance joint venture in China modeled on its Jiffy Lube stores in the U.S.
The joint venture will be called Anji Jiffy Lube Automotive Services Co. and Shell will partner Shanghai Automotive Industry Sales Corp., a unit of Shanghai Automotive Group Co., to launch the shops.
As China's auto market expands rapidly and individual car buyers start to outnumber corporate and government car purchases, multinationals are seeking new ways to reach into people's pocket books.
"We see a huge potential here," said David Pirret, chief executive officer of Shell Lubricants. "At the moment there are 23 million cars, which is only two cars per 100 population. If you compare with the U.S. it's 40 cars per 100 population. There's huge upside to come as China develops."
China is already among Shell Lubricant's top five markets in the world, and Shell doubled its sales volume in the past three years, said Pirret. China, he added, was the second-largest market for lubricants in the world.
The first 10 Jiffy Lubes will be opened in Shanghai to test the business model in the first year of operations, said Larry Burch, President of Jiffy Lube International. By 2015, the joint venture aims to have a network of more than 600 outlets across China, he said.
"We plan to be competitive in the neighborhoods where we operate. It will be priced below the original equipment dealers but above the mom-and-pop stores," said Burch. "There'll be a bit of an education process in China as well," said Burch.
The total investment of the joint venture will be US$23 million, and Shanghai Automotive Industry Sales, will hold a 50% stake, and Shell China Holdings B.V. and Shell (China) Ltd. will hold respective stakes of 40% and 10%, a statement issued by Shell said.
The outlets will carry the name Jiffy Lube Automotive Preventive Maintenance Centre and will display Jiffy Lube and Anji logos, Shell said. Shell will be the main provider of the lubricants sold in the shops.
Shell acquired Jiffy Lube in 2002 as part of its purchase of Pennzoil-Quaker State Co. Jiffy Lube has 2,200 outlets in North America and serves 80,000 cars per day.
-By Jane Lanhee Lee, Dow Jones Newswires; (86-21) 6120-1200; jane.lee@dowjones.com
-Edited by Andrew Bullard
Click here for ShellNews.net HOME PAGE