FAW Group To Sell 100% Stake In Chengdu FAW

Shanghai, March 9, 2009: (Gasgoo.com) Chinese auto giant FAW Group has put up for sale its all stake in Chengdu FAW Co., Ltd. The price is listed at 502,350,000 yuan ($72,550,000), as shown on the information platform of Tianjin Property Rights Exchange Center, Shanghai Securities News reported today.

FAW Group requires that the buyer of its whole stake in Chengdu FAW should be a Chinese passenger-car maker with registered capital of more than 7 billion yuan and annual sales revenue of 80 billion yuan.

Industry insiders said that only five or six state-run carmakers in China -- Changan Auto, Beijing Auto, Dongfeng Motor, SAIC, and Guangzhou Auto -- could meet these high requirements.

Chengdu FAW Co., Ltd. was founded, first as China FAW (Chengdu) Co., Ltd., in the capital city of southwestern China's Sichuan province in October 2002 with a total investment of 800 million yuan, based on Sichuan Passenger Vehicle Factory. In 2005, Chengdu FAW became a wholly-funded subsidiary of FAW Group.

Chengdu FAW has been one of the three manufacturing bases of FAW Group, with the other two in Changchun (where FAW is headquartered) and Tianjin. It is FAW's first modern production facility of passenger cars in southwest China to rival Changan Auto in the neighboring city of Chongqing.

One month ago, FAW VW, Volkswagen's Chinese venture with FAW Group, reportedly planned to delay expanding its Chengdu plant until 2011 amid slowing demand. The facility now builds 20,000 vehicles annually. The new assembly line was previously set for operation in 2010, to make 200,000 Jetta and Sagitar sedans each year.

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