The state-owned auto group will inject some assets into a new company it plans to set up for the listing of its core assets. The to-be-injected assets will include its passenger car division (its self-developed brand operations), powertrain department, new energy division, research operations, a 51 percent stake it holds in Beijing Automobile Works Co., Ltd., and some service, trading, and auto parts businesses.
In addition, after reaching accord with its foreign partners, the Chinese auto group will pump its shares in the two joint ventures Beijing Benz-DaimlerChrysler Automotive Co., Ltd. and Beijing Hyundai Motor Company. But the assets of Beiqi Foton Motor Co., Ltd. (SHSE: 600166) will not be put into the newborn, which is confirmed by the Shanghai-listed company.
BAIC, based in Beijing, will inaugurate the newborn this August, but it has not worked out a plan for its overall listing yet. In fact, the automaker has started a series of assets regrouping since the third quarter of this year. But it will not inject all its complete vehicle assets into the newborn.
In 2009, the Beijing-based auto group sold 1.21 million complete vehicles. Beiqi Foton alone contributed 602,021 vehicles, representing 49.75 percent of the group's total sales. Industry insiders pointed out that without the Shanghai-listed arm, the newborn will be obviously weaker in terms of assets strength.
The BAIC Chairman Xu Heyi will bet heavily on its self-developed passenger cars, whose sales volume is predicted to reach 100,000 in 2011. Its general manager Wang Dazhong disclosed that the auto group aimed to capture a stake of 50 percent in China's independent branded passenger car market in the future.
Currently, the auto group is busy growing passenger cars under its self-developed brand, with a base in Zhuzhou, Hunan Province, central China and another in Shunyi District, Beijing.
The Zhuzhou base is mainly engaged the production of mini products. Zhang Xin, general manager of BAIC's passenger car division, takes charge of the base. He said that sedans under its self-developed brand would roll off the production line in 2010, and hit the market the next year.
The products to be firstly put into production will be the economy sedan model BC301 and the mini car model BC306. The mini product project is an important project of BAIC, stressed Wang. The demand for mini products will be huge in second- and third-tier markets, particularly in rural areas.
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