Chery needs IPO funds for vigorous expansion

Chery Automobile Co, the top Chinese-branded vehicle maker, has completed its financial restructuring and would resume its long-awaited stock listing plan as soon as the market recovers, a company official said.

"Chery needs money from the stock market to fund aggressive expansion," said Jin Yibo, a spokesman for Wuhu, Anhui Province-based Chery. ''We give top priority to mainland bourses, and we are also encouraged by many investors to go overseas."

Chery, which earlier reported it would raise 100 billion yuan (US$14.6 billion) from a share sale, delayed the listing plan last year, fearing slumping stock markets amid a global financial crisis would make it less attractive to investors.

A company source told Shanghai Daily that the car maker has set the target to float shares this year on mainland stock markets which showed signs of recovery. The key Shanghai Composite Index rebounded to close at 2,358.04 yesterday, compared with 1,717 in November last year.

Jin, however, declined to comment on the listing schedule.

Chery has been striving to drive into the higher market segment and overseas. Jin said the company will launch 15 models this year, including two sedans that will compete with Toyota's Camry and Honda's Accord. It owns nine factories in seven countries and it is also building a new plant in Taiwan for complete-knock-down production.

It is also diversifying to the minivan market to boost sales after the central government said it would offer a tax break to spur vehicle demand in rural areas.

Yesterday Chery launched a new minivan, Karry You Pai, in Huaxi County in Jiangsu Province. The 1.0-liter minivan costs between 34,800 yuan and 42,800 yuan.