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Old 02-18-2009, 01:33 PM   #5
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BAIC to acquire Fujian Motor, Changfeng Motor.

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February 18, 2009 - To make itself one of China's auto giants, Beijing Automotive Industry Holding Corp (BAIC, or Beijing Auto) is set to expand by acquiring and restructuring Fujian Motor and Changfeng Motor, two Chinese carmakers related to Mitsubishi Motors, said 21st Century Business Herald today. The acquisitions will also help the Chinese partnerships of Daimler, Chrysler and Mitsubishi unite and focus on BAIC.

BAIC, the parent of commercial vehicle Beiqi Foton Motor and Chinese partner of Hyundai Motor and Daimler AG, aims to expand itself and become a Chinese auto giant like FAW, SAIC and Dongfeng, with annual sales revenue exceeding 100 billion yuan ($14.7 billion). To this end, BAIC has found no better choices than to acquire and restructure Fujian Motor and Changfeng Motor in southern China, as both of them have or had some relation with the Beijing-based auto group.

Fujian Daimler, which was founded by Fujian Motor, Daimler AG, and Taiwan's China Motor Corp in 2007, produces Daimler's commercial vehicles such as Mercedes-Benz Vito and Viano. After Chrysler pulled out of the three-way joint venture Beijing Benz-DaimlerChrysler (BBDC) in late 2008, the Beijing venture has shifted its production to Mercedes-Benz E-class and C-class cars for the Chinese market.

BAIC expects to restructure and develop Changfeng Motor into China's biggest SUV-manufacturing base, banking on Changfeng's strengths in the SUV market and its joint venture with Mitsubishi Motors. In Sept. 2008, BAIC started building a new plant in Hunan province's Zhuzhou city, close to Changfeng Motor, to produce BAIC's own brand passenger vehicles from 2010. The Zhuzhou facility is seen as BAIC's obvious advance to Changfeng.

Mitsubishi Motors, who operates its biggest Chinese venture Southeast (Fujian) Motors with Fujian Motor Group, has expected to integrate its operations and ventures in China under a local auto giant. Before its tie-up with Fujian Motor and Changfeng Motor, the Japanese carmaker had cooperated briefly with BAIC though their mutual U.S. partner Chrysler.

BAIC achieved 75 billion yuan in sales revenue last year and expects the figure to reach 100 billion yuan in 2009. The sales growth of 34.3% this year would be easier to come by if BAIC could complete its acquisitions of domestic automakers in ten months. The company said the restructuring plans are made ready, now only awaiting regulatory approval.
source: Gasgoo.com
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