AVIC's auto division to integrate Changhe, Hafei

Shanghai, March 17 (Gasgoo.com) Aviation Industry Corp of China (AVIC), the country's aviation giant, officially launched its auto division in Beijing on March 13, the National Business Daily reported. The new company will consist of Hafei Auto, Changhe Auto, Dongan Power and some other auto or auto-parts businesses of AVIC.

The newly launched auto industry corporation of AVIC will integrate assets from the aircraft-maker's several auto subsidiaries, including Jiangxi Changhe Auto, Harbin Hafei Auto and Harbin Dongan Auto Engine. The integrated auto corporation is expected to get listed as a whole in the future.

AVIC has decided to boost its auto business and expects its auto division to achieve sales revenue of 26 billion yuan ($3.8 billion) and gain 3.5% market share in China by 2011, with annual sales of 400,000 vehicles and 800,000 engines. The sales revenue may rise to 50 billion yuan and the market share to 5.5% by 2013.

The development of the two sister automakers Changhe Auto and Hafei Auto will be coordinated by their parent AVIV through its new auto division. The two AVIC subsidiaries both focus on the production and sales of small commercial vehicles.

Meanwhile, AVIC will also spin off the auto assets from its Hong Kong-listed AviChina Industry & Technology Co Ltd into the new auto unit. AVIC is looking for partners, such as PSA Peugeot Citroen and the French carmaker's Chinese partner Dongfeng Motor.