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Old 07-24-2008, 10:23 AM   #1
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Exclamation Zhongxing Auto serching for partner

Zhongxing Auto in talks with GM, FAW for co-op.
July 24, 2008 - China's Hebei Zhongxing Automobile Co is in talks with General Motors and major Chinese automaker FAW Group to explore opportunities for cooperation, including equity ties, a source close to the situation said on Thursday.

"Consolidation is inevitable in the Chinese auto market, which now has more than 100 players, and a company of Zhongxing's size makes a good takeover target or joint venture partner," the source told Reuters.

"Zhongxing is holding talks with several potential partners including FAW and GM to seek cooperative opportunities, including possible equity ties, but nothing has been decided at the moment," the source added.

A Zhongxing spokesman could not immediately be reached for comment and an FAW executive declined to comment.

GM's China spokesman Henry Wong also had no direct comment on the matter.

"We are a big auto company so we are always out there looking for opportunities and in discussions with everybody around the world. I don't actually have information on discussions in China," Wong said.

FAW has joint ventures in China with Volkswagen AG and Toyota Motor Corp.

Changan Auto plans to acquire Zhongxing Auto.
July 24, 2008 - Changan Automobile Group, China’s fourth largest automaker, plans to acquire China's Hebei Zhongxing Automobile Co through cooperating with Zhongxing at first for adding a facility manufacturing pickup and SUV, reports Beijing Times.

In mid-July, Changan Group vice president Wu Xuesong visited Hebei Zhongxing to negotiate export cooperation with the pickup maker for business in the American market. The two sides have agreed to build a “minitruck” jointly as initial American products, with other models also included in their agenda, sources said.

The two companies will start the second round of talks in the end of July as a result of unconfirmed cooperating details in the first negotiations. “Changan and Zhongxing haven’t decided which brand and what kind of sales channel for on US exports in the first round of talks,” said sources familiar with the matter.

The export cooperation is just an initial step, as Changan actually aims to take over Zhongxing Auto for an incremental pickup and SUV manufacturing base of Changan Auto.

Sources said Changan and Zhongxing plans to build a joint venture (JV) specializing in export business. The new company, to be registered in Hebei with the pickup as the main product, will be controlled by Changan.

But the JV project is not confirmed by Changan or Zhongxing.

Hebei-based Zhongxing Automobile Co., a joint venture invested by Taiwan Unite Leading Co. and Hebei Tianye Automobile Group Co., has an annual production capacity of 110,000 units, and its leading products are Zhongxing SUV and pickup series with more than 20 varieties.

Changan Auto, a joint venture partner with Ford Motor Co. and Mazda Motor Corp, is the fourth largest automaker in China. It has opened a second plant in Nanjing last September, with an initial annual capacity of 160,000 cars.
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