Beijing Auto, Guangzhou Auto vie for Fujian Motor

Shanghai, May 31 (Gasgoo.com) Chinese automakers Beijing Auto and Guangzhou Auto have been seeking to acquire Fujian Motor as they proceed on the road to expansion, state media said today, citing people familiar with the matter.

Beijing Auto, the Chinese partner of Hyundai Motor and Daimler, has approached financially troubled Fujian Motor, whose major passenger-car subsidiary is Southeast Motor Corp, over the potential acquisition. Fujian Motor makes commercial vehicles with Daimler AG in Fuzhou, while Beijing Auto assembles Benz cars with Daimler in Beijing.

The government's push for a consolidation of the fragmented auto industry propelled Beijing Auto, also known as Beiqi, to make a move in an effort to beat Guangzhou Auto to the acquisition. The deal still depends on government approval.

Beiqi had earlier eyed Changfeng Motors as a takeover target, part of a strategy to increase its capacity for sport-utility vehicles. Changfeng, the Chinese partner of Mitsubishi Motors, builds SUVs in Changsha in Hunan Province, and its 29% stake was recently bought by Guangzhou Auto.

Fujian Motor and its provincial government will jointly decide which suitor to select for the final marriage. Financially, Guangzhou Auto is a better choice, but Beijing Auto also has the fund injection of the municipal government. Fujian's top officials said they will choose one that is able to boost the province's auto industry, especially Southeast Motor's development.