Fiat, Guangzhou Auto agree on car venture.
May 22, 2009 - Citing Guangzhou Automobile's (GAIC) general manager Zeng Qinghong, the Shanghai Securities News says Fiat and GAIC have entered into an agreement to set up a car manufacturing joint venture in China.
This venture, however, is still pending government approval. Zeng would not disclose further information concerning the size of this new JV. Local media reports put the necessary investment in the venture at approximately Yuan 4.3bn (US$627.8m).
GAIC has also acquired one-third of a Fiat transmission plant in Hangzhou in eastern China, Reuters has said. Financial details concerning this deal, which took place earlier in the week, are yet awaited.
According to the report, Zeng has also put to rest speculation that GAIC was seeking a back-door listing via Shanghai-listed Hunan Changfeng Motor, in which the OEM has picked up a 29% stake. "Changfeng Auto is a listed company and a very good fund raising platform. But Guangzhou Auto is proceeding with our own plan to go public currently," the newswire quotes Zeng as saying.
sources: automotiveworld.com and gasgoo.comMay 22, 2009 - Fiat has signed an agreement to set up a car manufacturing venture with China's Guangzhou Automobile Industry Group, the Shanghai Securities News said on Friday, citing the Chinese automaker's general manager.
Zeng Qinghong did not disclose the size of the venture, which is still pending government approval.
The same newspaper said on Thursday the Fiat-Guangzhou Auto project would need an investment of 4.27 billion yuan ($625.7 million), citing a government document.
Guangzhou Auto, a partner of Toyota Motor and Honda Motor, sealed a deal on Thursday to take a 29 percent stake in Hunan Changfeng Motor Co (600991.SS), the newspaper said, confirming an earlier Reuters report.
It will buy the shares from Changfeng's state parent for around 1.05 billion yuan, becoming the largest shareholder of the sport utility vehicle specialist.
Under the agreement, Guangzhou Auto will invest 10 billion in Hunan province, the home base of Changfeng, in the next 5 years, increasing their joint vehicle production capacity to 500,000 units per year, it said.
Changfeng's current vehicle production capacity is 100,000 units.
Earlier in the week, Guangzhou Auto also acquired one-third of a Fiat transmisson plant in the eastern Chinese city of Hangzhou, Zeng was quoted as saying. It did not disclose financial details of the deal.
Zeng also dismissed a local media report claiming Guangzhou Auto would seek a back-door listing via Changfeng.
"Changfeng Auto is a listed company and a very good fund raising platform. But Guangzhou Auto is proceeding with our own plan to go public currently," Zeng was cited as saying.
Zeng told Reuters in April that both Shanghai and Hong Kong were ideal listing venues and the automaker had already submitted its application to China's securities regulator.