Shanghai October 18 (Gasgoo.com) Guangzhou Automobile Industry Group Co., Ltd. (GAC) is set to sign a joint venture agreement with Chinese minicar maker, Zhejiang Gonow Auto Co., Ltd., at the end of this month or early November, a source from Gonow Auto said on Saturday, First Financial Daily reported Monday.
GAC signed a strategic cooperation agreement with Gonow in Hangzhou, the capital city of east China's Zhejiang province, on April 26, 2010. According to the agreement, the Guangzhou-based automaker will allocate a certain amount of cash to restructure relevant assets of Gonow and build a new company under the name "Guangqi Gonow", in which GAC will hold 51% stake and the rest 49% stake will belong to Gonow.
The third party already did a preliminary asset valuation on Gonow's assets, the above source said, both sides are now awaiting the conclusions to determine the transaction price.
Regarding the rumored 2.5 billion yuan (376 million) investment in the joint venture, the source said he has been involved in the evaluation, stressing that no speculations are reliable before the evaluation is ended.
Gonow will not largely adjust its product planning, and will still focus on production of micro vehicle, SUV and pickup in the future. However, its development scale must be enlarged rapidly because GAC wants to increase sales of the restructed Gonow to 600,000 units by 2015.
