It is reported yesterday that the Dongfeng Motors Company signed an agreement to acquire 25% stake in its finance affiliate Dongfeng Motor Finance Taiwan Acceptance (BVI) Ltd at a price of 166 million yuan (US$21.8 million). Taiwan Acceptance (BVI) Ltd, an independent entity which currently holds 25% stake, has agreed to sell its entire stake in the finance firm.
The agreement said Taiwan Acceptance will no longer hold the Dongfeng Automobile Finance shares and the shares of Dongfeng Automobile financial equity held by Dongfeng Automobile Group will increase from 47.5% to 60%. This is a sound strategic acquisition as finance is playing a bigger part in the Chinese automotive industry as an increasing number of consumers use credit to finance vehicle purchases.
