IN a race to become China's leading family car manufacturer, Chongqing's Changan Automobile Co is seeking a B-share listing to fund a 2.8 billion yuan (about HK$2.6 billion) expansion plan. The investment would catapult Changan's production capacity to 150,000 family cars by 1997 from 10,000. General manager Jiang Congshou said the company would proceed with the issue after China promulgated new national B-share regulations. These would supersede the existing rules in Shanghai and Shenzhen, but their announcement had been delayed from last year. 'We will try to float the company on the market next year,' Mr Jiang said. Changan plans to issue 300 million B shares, raising about 800 million yuan. Mr Jiang said any shortfall in funding would be made up with loans. Mr Jiang said he was confident of winning approval from the China Securities Regulatory Commission, saying that the watchdog had asked the company to go ahead with the preparatory work, including financial accounts audits and asset revaluation. Changan had yet to arrange a sponsor, but the decision would be made by the year's end, he said. It is understood that HG Asia and Daiwa Securities were vying for the listing mandate. Mr Jiang said the listed vehicle would include Changan's 51 per cent stake in a joint venture to make family cars, which was operational this year, with Japan's Suzuki and Nissho Iwai and a Malaysian partner. Changan, which makes Alto brand cars using Suzuki technology, was one of the two biggest minicar makers in China, along with Guizhou Aerospace's Rex cars. Changan also makes minivans and small lorries. Mr Jiang said the State Council ratified Changan early this year as the fifth family car manufacturer and approved its plans to boost production capacity to 150,000, allowing it to invest 2.8 billion yuan, and including this in China's Ninth Five-Year Plan. The other four competitors were First Automobile Works, Dongfeng Automobile, Tainjin Automobile and Shanghai Volkswagen. First Automobile and Dongfeng Automobile were also planning a H-share listing to fund expansion. Mr Jiang said Alto cars would be sold for less than 50,000 yuan in 1997, compared with 66,000 yuan now. The Chinese-made components would account for 80 per cent of the parts used in the cars by then. 'Our production of Alto cars has been restricted by the small portion of local components we used which means a higher production cost,' he said. 'If we have to rely on imports, it will also expose the company to foreign exchange risks.' Changan expected Alto local content to rise to 60 per cent this year from last year's 46 per cent. Mr Jiang said the company would make 72,000 cars this year, of which 10,000 would be family cars. He said the company was expected to make more than 400 million yuan in pre-tax profits this year.