11.10Changan to take over carmakers from AVIC

Changan to take over carmakers from AVIC

http://autonews.gasgoo.com/auto-news/1012883/Changan-to-take-over-carmakers-
from-AVIC.html

Shanghai, November 10 (Gasgoo.com) China's Changan Automobile Group
announced today that it would take over two automakers under the Aviation
Industry Corporation of China (AVIC), the country's national aircraft maker,
Xinhua News reported. This is the largest merger deal in the Chinese auto
industry for years.

 

The parent of Chongqing Changan Automobile Co Ltd will acquire Harbin Hafei
Automobile Industry Group and Jiangxi Changhe Automobile from AVIC, top
officials of Changan and AVIC announced this morning at a high-profile press
conference in the Great Hall of the People in Beijing. 

 

The restructuring will also involve Changhe Auto's joint venture Changhe
Suzuki Automobile Co. and AVIC's auto-parts company Harbin Dongan Auto
Engine Co., together with joint venture Harbin Dongan Mitsubishi Automotive
Engine Manufacturing Co. The financial details of the deal have not been
disclosed yet.

 

After its auto-making business and auto-parts assets are merged into
Changan, AVIC will hold 23% stake in the new Changan Automobile Group, with
the majority 77% share to be controlled by Changan Group's parent China
Weaponry Equipment Group. Changan and AVIC are both military-turned-civil
enterprises owned by the state.   

 

Changan Auto Group, a Chinese partner of Ford Motor and Mazda Motor, sold
127,600 vehicles last month, up 122% from a year earlier, and total sales
for the first ten months grew 57% to 1,131,500. It is vying with Dongfeng
Motor Group to become the third biggest Chinese automaker (after SAIC Motor
and FAW Group). 

 

The restructuring will boost Changan Auto Group's annual auto production
capacity to nearly 2 million units. The restructured group aims to sell more
than 2.6 million vehicles by 2012. It targets sales reaching 5 million units
by 2020. 

 

The Chinese government announced earlier this year that it plans to
encourage consolidation of its auto companies into a "big four" and a "small
four" segment to make the industry more competitive with established foreign
rivals.

 

 

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