Chinese carmaker Nanjing may sell up to 50 percent stake

NANJING (Reuters) -- Nanjing MG Motor Co. may sell as much as a 50 percent stake to outside investors to help fund its expansion, its general manager said today.

Nanjing MG is a unit of Nanjing Automobile Group, a medium-sized player based in eastern China that surprised the motoring world when it took over MG Rover in 2005 after the British carmaker collapsed, outbidding China's biggest carmaker, SAIC Motor Corp., to obtain rights to the MG sports car brand.

The company will roll out two mid-ranged MG 7 series sedans and an MG TF sports car on Tuesday, March 27, priced at between $23,255 to $51,710 (180,000 yuan and 400,000 yuan), Zhang Xin told Reuters in an interview.

It will need $258.5 million to $387.8 million (2 billion to 3 billion yuan) to increase capacity in the next several years, he added.

"We have been in talks with several potential partners, including funds, in North America and Europe and could sell as much as 50 percent," Zhang said.

The company also hopes to sell 200,000 vehicles in five years' time, he added.

Nanjing Auto is one of China's oldest vehicle makers, beginning life as a military garage in 1947. Its first attempt at vehicle production was a light truck called the "Yuejin" or "Leap Forward", a vehicle still seen on Chinese roads today.

It has faced financial difficulties since the late 1990s as domestic rivals secured alliances with foreign firms such as Ford Motor Co., BMW and Honda Motor Co., and chipped away at its market share, analysts have said.