Lifan Industry (Group) Co, the first privately-owned automaker to trade on the Shanghai Stock Exchange, will begin trading Thursday as it seeks to raise funding for its passenger car facility and other projects.
The Chongqing-based company, which ranks among the nation's top motorcycle producers, raised 2.9 billion yuan ($436.22 million) in an initial public offering at 14.5 yuan ($2.18) per share.
In 2006, when Lifan entered the auto-making field, it was short on capital.
Then in 2008 the company got a $90 million injection from AIG, which industry watchers said was not nearly enough to turn around the company's car business.
In 2009, when China's auto market eclipsed the US' to become the world's largest - with a more than 46 percent sales increase year-on-year - Lifan sold only 41,699 vehicles, less than 2 percent of the total annual sales of the nation's largest automaker, SAIC Motor Corp.
Chen Zheng, an auto analyst with China Securities, told the Global Times it's a big challenge for Lifan to try to reproduce the success it had in the motorcycle industry in the auto sector.
"The listing will definitely help alleviate the company's thirst for cash. Also the advantages the company has with its sales network, management system and engine development skills are sure to win Lifan investors," said Chen.
Lifan plans to invest the proceeds from the offering into an annual 150,000 unit capacity passenger car facility.
In total, Lifan hopes to produce nearly 500,000 vehicles a year by 2015.
Lifan brand vehicles include three sedan models: the 320, 520 and 620.
Shanghai-listed automakers include SAIC Motor, Dongfeng Automobile Co and Anhui Jianghuai Automobile Co.
Other rivals including Beijing Automotive, FAW Group and Chery Automobile, also plan to go public to ramp up expansion.
