CHINA Aerospace International Holdings has signed conditional contracts to establish two joint ventures that will be involved in the manufacture of light vehicles in China. Two wholly owned subsidiaries of China Aerospace - Aircar Assets and Sinolike Investments - signed the agreements with China Jiangnan Space Industry (CJSI), wholly owned by China Aerospace Corp, to set up Guizhou Huahang Automotive Manufacturing Co and Guizhou Huatian Automotive Parts and Accessories Manufacturing Co respectively. Aircar and Sinolike will each hold 95 per cent stakes in the joint ventures and contribute a total of US$107.9 million in registered capital. CJSI will contribute the remaining five per cent. China Aerospace, 14.54 per cent-owned by China Aerospace Corp, and CSJI also signed a conditional contract which will see the two firms jointly buy certain light vehicle assembly and parts and accessories plants owned by CSJI in Guizhou province. The deal also includes 30-year leases for land and buildings, certain community services, certain raw materials and components to be sourced by CSJI to the joint venture, and the registered trademark of GGG and the brand name Hangtian. It is intended that Guizhou Huahang will manufacture at least 10,000 light vehicles during its first year of production, at least 20,000 during the second to fourth year, and at least 40,000 by the fifth year. During Guizhou Huatian's first year, it will make at least 20,000 of each type of parts and accessories, at least 25,000 during the second to fourth year and at least 50,000 by the fifth year. The plant, which employs 6,200 people, now has annual production capacity of 10,000 vehicles and 15,000 sets of each type of parts and accessories. For the last fiscal year ended December 31, the plants' combined profits jumped 47 per cent to 51.8 million yuan (about HK$69.41 million at the official rate) from 35.2 million yuan. Turnover nearly doubled to 586.4 million yuan from 293.9 million yuan. For the eight months to August 31, profits were 64.8 million yuan while turnover was 419.7 million yuan. CJSI was formed last year from the former Guizhou Space Industry Corp, which was established in 1966. CJSI is involved in the development and manufacture of high-technology products such as electron-position colliders and synchrotron radiation accelerators, which are mainly used in the space and defence industries. For the year ended December 31, it had a turnover of more than 1.2 billion yuan. Since 1984, CJSI has been involved in the development and manufacture of light vehicles. China Aerospace, which plans to raise HK$1.12 billion through a rights issue, said the car sector offered tremendous potential because domestic demand was growing rapidly.