8.12Hafei Auto's parent and Changan in talks for merger

Hafei Auto's parent and Changan in talks for merger

 

http://autonews.gasgoo.com/auto-news/1011711/Hafei-Auto-s-parent-and-Changan
-in-talks-for-merger.html

 

Shanghai, August 12 (Gasgoo.com) Aviation Industry Corp of China (AVIC), the
parent of Hafei Auto Group and Changhe Automobile, in still in talks with
Changan Auto Group for a proposed merger in an attempt to form a mini-van
giant in China, the 21st Century Business Herald reports Wednesday. 

 

A senior AVIC official told reporters that the two parties still keep in
touch on the matter but no agreement has been reached so far. 

 

Sources in Changan Auto said one possibility is to integrate both Hafei and
Changhe into Changan Auto. The result will be that Changan Auto can
restructure their minivan capacities, engine (and other parts) supplier
relations, and sales networks. 

 

Changan said in June it plans to double its minivan capacity to 1.2 million
units from the current level in two years and triple that capacity to 1.8
million units within five years. 

 

"The deal depends on whether AVIC would like to drop its auto divisions,"
said Cao He, an auto industry analyst from China Minzu Securities Co. 

 

AVIC launched its auto division in Beijing this March with Hafei Auto,
Changhe Auto, Dongan Power and some other auto or auto-parts businesses of
AVIC included in it. AVIC determined at that time to boost its auto business
and expects its auto division to achieve sales revenue of 26 billion yuan
($3.8 bn) and gain 3.5% market share in China by 2011, with annual sales of
400,000 vehicles and 800,000 engines. 

 

In related report, PSA is resuming partnership talks with Hafei and the two
sides may sign a JV deal as early as this September.

 

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