Business / Auto China

Fisker deal won't accelerate Wanxiang Qianchao

( Updated: 2014-02-26 15:27

Chinese car manufacturer Wanxiang Electric Vehicle Company has no role in Fisker Automotive Inc, reported Securities Daily on Tuesday.

Fisker deal won't accelerate Wanxiang Qianchao

Fisker deal won't accelerate Wanxiang Qianchao
Wanxiang wins Fisker auto bid 
As a wholly-owned subsidiary under Wanxiang Group, Wanxiang Electric Vehicle Company manufactures electric vehicles. Due to technical differences with Fisker, which produces electric vehicles, the operation of Wanxiang Electric Vehicle Company, which has seen its share prices surge for three consecutive days, will not be influenced by Wanxiang Group's acquisition. Wanxiang Qianchao has no plans to invest in Frisker in the next two years, the company said.

Wanxiang Qianchao Company, a listed auto parts manufacturer, is controlled by Wanxiang Group. The deal will not impact Wangxiang Qianchao's revenue in the next two years even if the company supplies parts to Fisker, because it is hard to mass produce new energy cars in next two years, said Wanxiang Qianchao.

The announcement shows Wanxiang Qianchao does not have the motivation to invest in Wanxiang Electric Vehicle Company as the electric vehicle company is unprofitable, and facing investment risks.

Although the acquisition has been confirmed by US Bankruptcy Court, it needs approval from Committee on Foreign Investment in the United States, and the US Senate Antitrust Subcommittee.

In additional, it also should be approved by National Development and Reform Commission, Ministry of Commerce, and Administration of Exchange Control in China. Therefore, the deal continues to face uncertainties.

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