BAIC acquires 70% stake in Changhe Auto
Beijing Automotive Industry Group Corp. has contracted to buy a 70 percent stake in Jiangxi Changhe Automobile Co., a microvan maker in east China's Jiangxi province.
Under the agreement the two state-owned companies signed last week, BAIC will invest 13 billion yuan ($2.1 billion) in Changhe by 2017.
The investment will be used to expand Changhe's annual production capacity to 500,000 vehicles, up from 300,000 vehicles now. In the long term, BAIC will raise Changhe's annual capacity to 1 million vehicles, according to Changhe.
After the acquisition, Changhe will expand its product lineup to include sedans, SUVs and MPVs. It also will start building vehicles that carry BAIC's brands.
In the future, Changhe and BAIC will use common platforms to develop some of their new models, said Changhe, without providing further details about its product plans.
Changhe is located in Nanchang, the capital of Jiangxi province. The company previously was owned by China Changan Automobile Group Co. But the two state-owned companies broke apart earlier this year after Changhe resisted Changan's integration plan.
BAIC, a major state-owned company running joint ventures with Hyundai Motor Co. and Daimler AG, has embarked upon an aggressive expansion. Earlier this year, the company acquired Zhenjiang Automotive Works, a small light commercial vehicle maker in east China's Jiangsu province.
The investment will be used to expand Changhe's annual production capacity to 500,000 vehicles, up from 300,000 vehicles now. In the long term, BAIC will raise Changhe's annual capacity to 1 million vehicles, according to Changhe.
After the acquisition, Changhe will expand its product lineup to include sedans, SUVs and MPVs. It also will start building vehicles that carry BAIC's brands.
In the future, Changhe and BAIC will use common platforms to develop some of their new models, said Changhe, without providing further details about its product plans.
Changhe is located in Nanchang, the capital of Jiangxi province. The company previously was owned by China Changan Automobile Group Co. But the two state-owned companies broke apart earlier this year after Changhe resisted Changan's integration plan.
BAIC, a major state-owned company running joint ventures with Hyundai Motor Co. and Daimler AG, has embarked upon an aggressive expansion. Earlier this year, the company acquired Zhenjiang Automotive Works, a small light commercial vehicle maker in east China's Jiangsu province.
