Business / Auto China

Two Chinese carmakers make major acquisitions

By Hao Yan (China Daily) Updated: 2016-03-21 09:43

By melding its dealership network with the Fujian joint venture, Beijing Benz could boost sales of MPVs, Jia said.

"Despite their excellent products, Fujian Benz and Fujian Motor had weak sales. They lack marketing resources, but with Beijing Benz, business could be more prosperous," he said.

Hubertus Troska, the member of the Board of Management of Daimler AG responsible for Greater China, said, "We are happy to see the cooperations happen, though we are not leading the deal.

"The cooperation between BAIC Motor and Fujian Motor will bring more opportunities. … The two joint ventures are not integrating their business."

GAC expands lineup

GAC, on the other hand, is looking to rebuild current plants and construct new facitities to expand its lineup of MPVs and pickups with new sedan models. The carmaker said it expect a higher market share in the eastern Chinese market, according to the company's news statement.

GAC Gonow has three vehicle manufacturing bases in Zhejiang province, with total annual production capacity of 460,000 units. In 2010, Zhejiang Gonow Holdings Group Co, with assets valued at 617 million yuan, held a 49-percent share of the joint venture with GAC.

"BAIC's move is more strategic, while GAC is making managerial changes. Mergers and acquisitions in the auto industry are accelerating, as companies are in need of intensive management and production," said Zhang Junyi, a partner at Roland Berger Strategy Consultants.

Integrating the production plants of Fujian Benz and GAC Gonow will help BAIC Motor and GAC allocate production more reasonably to elevate profitability, Zhang said.

Both BAIC and GAC acquired carmakers with expertise in building MPVs.

Zhang said many carmakers see great opportunities in the MPV sector.

"There are great opportunities in the premium MPV segment on the Chinese mainland. The Toyota Alphard is almost the only choice in the segment, and some customers even pay extra to dealers to get it delivered sooner."

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