Shanghai, June 12 (Gasgoo.com) China's largest automaker SAIC Motor is set to acquire Kunming Yunei Power Co., which will likely produce diesel engines for SAIC's passenger cars, National Business Daily reported yesterday.
The acquisition of Yunnei Power, an engine company based in Kunming city, capital of southwestern Yunnan province, will provide SAIC Motor an important link in its auto business. Currently SAIC has only its self-developed gasoline engines, and by adding diesel engines, the auto giant will have more engine options at hand.
Yunnei has relied on traditional light diesel engines for profits, but is planning to develop diesel engines for passenger cars. As the Chinese government has started to fuel-efficient cars, the diesel engine has become a favorite choice for many automakers in the country.
Although it produces only 12,000 diesel engines per year now, Yunnei's annual output will be raised to a much higher level after SAIC buys into the company. Yunnei's engines have been used in the JAC Eagle SUV and Dongfeng Feng Hang MPV.
SAIC will focus on the auto parts and components sector in its new restructuring efforts. For this purpose, the company has earmarked up to 5 billion yuan ($732 mln) to acquire auto parts makers to improve its industry chain.
