U.S. engine maker backed by Bill Gates forms second China venture

DETROIT Tue Mar 4, 2014 8:58pm EST

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DETROIT (Reuters) - EcoMotors, a Michigan-based engine maker backed by Microsoft 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.

FAW's manufacturing partners in China include Volkswagen AG (VOWG_p.DE), Toyota Motor Corp (7203.T) and General Motors Co

(GM.N).

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

(Reporting by Paul Lienert in Detroit; Editing by Edwina Gibbs)

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