FAW Group's restructuring goes up a gear

PUBLISHED : Thursday, 14 July, 2011, 12:00am
UPDATED : Thursday, 14 July, 2011, 12:00am


Carmaker FAW Group, the Chinese joint-venture partner of Volkswagen, Audi and Toyota, yesterday moved a step closer to reorganising its massive asset portfolio in preparation for a new listing.

Changchun-based FAW Group, directly owned by the State Council, said it established a new holding company last month for its sprawling car industry interests, the latest step in its long restructuring process ahead of an anticipated stock market listing. FAW Group yesterday said it transferred its stake in key subsidiaries to newly created holding company China FAW Holdings.

The assets affected include FAW Group's 53.03 per cent stake in Shenzhen-listed FAW Car and its 47.73 per cent stake in Shenzhen-listed Tianjin FAW Xiali Automobile.

FAW Group's latest step towards reorganisation is the most recent development in Beijing's long and complicated restructuring and consolidation of the biggest players in the fragmented car industry.

Rival state-owned, unlisted carmaker Beijing Automotive Industry Holding Co, the joint venture partner of Hyundai and Daimler's BMW, has been undergoing a similar process. Likewise, SAIC Motor, China's biggest carmaker and partner of General Motors and Volkswagen, announced it was buying a range of sales, service and component-making businesses from its state-owned parent firm in a 28.5 billion yuan (HK$34.3 billion) deal.

FAW Group said in addition to the stakes in the two listed carmakers, China FAW Holdings will now be the holding company for the parent group's 48.67 per cent stake in Shenzhen-listed Qiming Information Technology, its 20.14 per cent holding in Shanghai-listed Changchun Faway Automobile Components and its 23.51 per cent stake in Shanghai-traded Changchun Yidong Clutch.

In stock exchange announcements yesterday, FAW Car and Tianjin FAW Xiali said their parent, FAW Group, booked revenue of 294.02 billion yuan last year, up 42.4 per cent from 2009. Net profit rose to 24.9 billion yuan, up 57 per cent from 15.86 billion yuan in 2009.


The number of vehicles sold by FAW Group last year, making it the third-most productive vehicle-maker on the mainland in 2010