It would use six billion yuan of the issue proceeds for acquisitions by its commercial vehicle unit, to inject funds into the company's financing arm, and to repay loans.

In December, Shanghai Automotive Industry Corp completed injecting assets into A-share Shanghai Automotive in return for 19.1 billion yuan, the parent's first step to streamline the unit's corporate structure and prepare it for developing self-branded products.

Shanghai Automotive and other Chinese carmakers are building their own brands of cars in response to the government's 11th Five-Year Plan.

Shanghai Automotive said it planned to bolster its market position by building a wide range of cars such as economy models, mid-range cars and sports-utility vehicles in the next five years, on top of designs bought from Britain's MG Rover in 2004. It would launch 30 independently designed mid-range models from next year to 2010 at between 65,000 and 300,000 yuan each, it said in December.

By 2010, its output of own-brand cars should reach 250,000 per year, the company said.

The company, which started selling its first self-branded passenger car Roewe 750 in January and sold 7,500 units in the first six months, will make its own engines and build a technology centre for research and development with an accumulated investment of 10 billion yuan.

It also plans to buy local and global assets in the next three years to develop commercial vehicles.

Shanghai Automotive, the first domestic carmaker to streamline its corporate structure with complete vertical integration of its production processes, said funding the development of its own brands by issuing bonds could lift revenue and help maintain its profitability.

Shares of the firm, which have doubled in the past 12 months, closed up 4.8 per cent at 22.93 yuan in Shanghai yesterday.