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December 5, 2009

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Home » Business » Auto

BAIC gets nearly US$3b from BOC

BEIJING Automotive Industry Holding Corp has obtained a 20-billion-yuan (US$2.93 billion) line of credit from the Bank of China, the bank said yesterday.

BAIC has said it might still be interested in buying General Motors' Saab unit, after a consortium led by tiny Swedish luxury car maker Koenigsegg, pulled out of talks last week. BAIC was a member of that consortium.

BAIC declined to comment further.

Major Chinese car makers are hungry for money to upgrade their technologies, lift output and eventually tap into the global market, and it is reasonable for Chinese state-owned banks to provide them with liquidity.

The credit that BAIC, China's fifth-biggest car maker, gets is seen enough to boost the production scale of the Beijing-based firm, which does not have its own car brand.

Its four-year old Mercedes-Benz car venture with Daimler AG broke even last year, and its tie-up with Hyundai Motor Co has a long way to go before catching up with top players in the market.

"Twenty billion yuan is more than enough for production expansion," said Li Chunbo, an analyst with CITIC Securities.

A day earlier, Chinese car and battery maker BYD Co got a 15-billion-yuan loan from BOC to expand in the battery, new energy and car sectors.

Geely, the Chinese car maker picked as the favored bidder for Ford Motor's Volvo unit, is seeking at least US$1 billion from Chinese banks.


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