AVIC to supervise Hafei, Changhe auto business

Shanghai, November 17 (Gasgoo.com) The China Aviation Industry Corp (AVIC), formed by the merger between AVIC I and AVIC II earlier this month, will carry on its automotive and airplane at the same time. The new AVIC will set up an auto industry group as a division to supervise its two auto subsidiaries - Hafei Auto and Changhe Auto, said xinhuanet.com today.

Following this big merger of their parent company, Hafei and Changhe have worked out their "three-year revival plan" separately. The ambitious plan of Changhe Auto states that the company's sales will achieve 400,000 vehicles by 2010. Changhe Auto has recently denied the earlier report that it would be merged into Changan Auto Group.

As part of its division, the new AVIC will set up an automobile industry group to restructure and supervise the operations of Hafei Auto and Changhe Auto, which are the subsidiary auto companies of the former AVIC II.

AVIC is pushing forward the restructuring of the auto subsidiaries and their assets of its predecessors AVIC I and AVIC II. In its great ambition of "gaining 1 trillion yuan ($146.3 billion) in sales revenue by 2017," the auto-making operations will play an important role.

The auto sales target to be initially set for Hafei and Changhe will be valued at 40 billion to 50 billion yuan, disclosed an insider from AVIC. The aviation giant has 10 business units, including defense, helicopters, aircrafts and automotives.