Car maker keen to buy rival to expand

By Vivian Jin | February 19, 2009, Thursday |

Print Edition

BEIJING Automotive Industry Holding Co is in talks to acquire Fujian Motor Industry Group as it proceeds on the road to expansion, people familiar with the matter said.

The Chinese partner of Hyundai Motor Corp and Daimler AG approached loss-making Fujian Motor and its major passenger car subsidiary Southeast Motor Corp last year over the potential acquisition.

Another source also said the government's push for a consolidation of the fragmented auto industry propelled Beijing Auto, also known as Beiqi, to shift gears and moved faster to beat Guangzhou Automotive Industry Corp toward the acquisition. The deal still depends on government approval, the source added.

In a telephone interview with Shanghai Daily yesterday, Xu Heyi, chairman of Beijing Auto, didn't deny the deal talks but declined to give further information.

Beiqi had earlier eyed Changfeng Motors Group Co as a takeover target as it wanted to boost its capability in producing sport-utility vehicles, the source added.

Xu earlier said the car maker wants to set up passenger car production facilities in southern China.

Fujian Motor makes commercial vehicles with Daimler AG in Fuzhou in Fujian Province while Beijing Auto assembles Benz cars with Daimler in China's capital.

Changfeng, the Chinese partner of Mitsubishi Motors Corp, builds SUVs in Changsha in Hunan Province.

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Car maker keen to buy rival to expand

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