Baoneng conducts due diligence on BAIC’s subsidiary

Shanghai (Gasgoo)- Recently, sources close to BAIC revealed that Baoneng, the new controlling shareholder of Qoros, conducted due diligence on Changhe Suzuki, a brand under Jiangxi Changhe Automobile. According to the disclosed information, Baoneng plans to acquire the manufacturing license and Jiujiang factory of Changhe Suzuki, which has been reported to the government.

Just several days ago, BAIC, the controlling shareholder of Changhe, made personnel changes in Changhe Auto and merge Weiwang brand into Changhe Auto. Apparently, Changhe’s transformation has entered into new stage.

Cui Dongshu, secretary-general of the China Passenger Car Association, said in an interview that the acquisition is possible. An analyst in auto industry revealed that although Suzuki hasn’t withdrawn its capital, the Japanese automaker hasn’t introduced new models for many years. Another source said Suzuki may pull out if Baoneng would offer reasonable price.

It is reported that since the other joint venture also has not so good performance, Suzuki may quit China market in the future. The source made it clear that Suzuki won’t retreat from China, but that it is currently introspecting its strategies in China.

Currently, Changhe Auto has two brands, Changhe brand and Changhe Suzuki. Its two production bases, in Jingdezhen and Jiujiang, with three vehicle and engine factories have an annual capacity of 320,000 vehicles and 150,000 engines. As the capacity of Jingdezhen base is enough for its sales, it makes sense for Changhe Auto to sell Jiujiang factory to Baoneng.