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Chery confirms interest in overseas acquisitions

CHERY Automobile Co confirmed yesterday that it is interested in buying overseas car makers after media reports of approaches to acquire Ford's struggling Volvo unit.

"The global financial crisis provides good opportunities for China's self-branded car makers," Chery spokesman Jin Yibo said yesterday. "If there is any chances for us, we won't give up the possibility for development."

Chery has been in contact with several European car makers about possible takeovers, the Beijing Times reported yesterday, citing chairman Yin Tongyue.

Yin said that it was likely Chery would buy a struggling European car brand but didn't mention any names, the newspaper said.

China's Geely Automobile Co, Chongqing Chang'an Automobile Corp and Chery were three car makers reported to have approached Ford about its Swedish Volvo unit.

A Bloomberg report, later denied by the company, said that Geely had begun preliminary talks with Ford last December and gained permission from the state government to investigate an acquisition.

"Chery is keen for advanced technology and a higher brand image," said Yale Zhang, director of automotive consultancy CSM Asia's Shanghai office. "But there remain huge risks for the acquisition as huge amounts of money are needed and it is questionable how Chery would manage the profit-losing car unit afterward," he said.

Ford paid US$6.4 billion for Volvo in 1999. Zhang said that it would be wiser for Chery to buy technologies and manufacturing facilities rather than the whole company.

State-owned Chery was China's seventh biggest car maker in terms of sales last year. It is also the only independent Chinese car maker not to have an overseas partner in China.

Chery is aiming to boost sales by 20 percent, to 419,000 units, this year.


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