Beijing Automotive Group to list car unit BAIC Motor
Carmaker to embark on fundraising drive as part of ambitious production comeback
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Beijing Automotive Group, the country's fifth-largest carmaker in terms of sales, is planning initial public offerings for three units to fund an ambitious business expansion over the next three years.
The group expected to list its passenger car unit in Hong Kong and Shanghai as early as next year, before offering shares in a component unit and a car service unit in the future, Li Zhili, a board director, said yesterday.
It hopes the Hong Kong listing of BAIC Motor could raise 10 billion yuan (HK$12.4 billion) to produce "world-class" Beijing-brand cars. Company executives declined to say how much the group hoped to raise in total, but said they targeted a doubling of sales in four years.
"We will strive to make annual output and sales exceed three million units by 2015, with sales revenue of over 350 billion yuan," Li said. "We will try to turn into an influential world-class automobile group."
BAIC Motor sold 1.5 million cars last year, generating revenue of 201 billion yuan. In the first nine months of this year, sales rose 4.8 per cent from a year ago to 1.2 million units. The rise was 1.43 percentage points faster than the industry average on the mainland, according to the group.
The ambitious financing scheme underscores the group's desire to make a strong comeback after its production of Beijing sedans ended in the early 1980s amid financial woes and a shift to co-operation with foreign partners.
The group, which produces cars with Hyundai and Daimler on the mainland, launched its first local model in three decades in March - a subcompact of the E-series built on the platform of Daimler's Smart For Four.
Jia Xinguang, an analyst with the China Automobile Dealers Association, said the group and the Jilin-based First Automobile Works were the two last carmakers whose major assets were still unlisted and controlled by local governments.
"The IPOs of the Beijing group's major assets would be a step forward to the industry's transformation to modern car companies," Jia said.
The only listed subsidiary of the group is BAIC Foton, which began trading on the Shanghai exchange in 2009.
Mainland car sales growth have slowed in the past few months because of the softening economy and buying restrictions in major cities to relieve traffic pressure.
In a bid to boost competitiveness in a slowing market, Guangzhou Automobile Group formed an alliance with fellow mainland firm Chery Automobile on Tuesday to share core technology and management experience.