China Auto News of the Week (Sept. 21 - 25, 2009)

Geely, Goldman in talks on $250 mln bond deal

Shanghai, September 21 (Gasgoo.com) A private equity unit of Goldman Sachs Group is in talks with Geely Auto to buy about $250 million of the biggest privately-owned Chinese carmaker's convertible bonds and warrants, media reported today, citing sources.

"The two sides have basically agreed on the investment in Geely already, but have yet to work out some technical details," one source with direct knowledge of the deal told Reuters. Confirmation of the deal could be announced as early as this week.

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China's first auto wind tunnel operates in Shanghai

Shanghai, September 21 (Gasgoo.com) China's first automobile wind tunnel started operation at Tongji University in Shanghai on Sept. 19, making a significant breakthrough in the country's automobile development and production, media reported.

The Shanghai vehicle wind tunnel center, which can simulate all kinds of driving environments and test vehicles' basic standards, will provide testing services for manufacturers of cars, buses, SUVs, trucks and train models. It will also facilitate the research and development (R&D) of new-energy vehicles, high-speed trains and big airplanes.

Dongfeng Peugeot 307 unveiled in Chengdu

Shanghai, September 22 (Gasgoo.com) At the ongoing Chengdu motor show, Dongfeng Peugeot Citroen has launched the Peugeot 307 model, which marks the foray of the Peugeot 307 series into China's medium-class vehicle market, gasgoo.com said today.

The joint venture aims to sell 20,000 units of the new Peugeot 307 model in the remainder of this year. The Peugeot 307 sedan sells at a price between 106,800 yuan ($15,640) and 146,800 yuan, and the Peugeot 307 hatchback is priced at 103,800-153,800 yuan.

FAW-Mazda to release three new models in 2010

Shanghai, September 22 (Gasgoo.com) FAW-Mazda is planning to launch three new car models next year, ranging from sedan to MPV, China Car Times said today.

FAW-Mazda said it will introduce the sports version of the new Mazda6 model, and will also introduce the Mazda8 and the Mazda CX7 as locally produced vehicles.

SAIC-GM-Wuling set to launch Wuling sedan

Shanghai, September 23 (Gasgoo.com) SAIC-GM-Wuling (SGMW) is developing its Wuling-brand sedan and plans to launch the compact mid-size model codenamed GP50 at the end of 2010, the venture's passenger car project director told Gasgoo.com yesterday.

SAIC-GM-Wuling Automobile Co., General Motors' mini-commercial-vehicle venture with SAIC Motor and Wuling Auto, will build the GP50 sedan model mainly on the technical platform of Pan-Asia Technical Automotive Center (PATAC), an auto tech and design venture of GM and SAIC.

SAIC may help Volkswagen buy Ssangyong Motor

Shanghai, September 23 (Gasgoo.com) Volkswagen AG is planning to acquire the cash-strapped South Korean automaker Ssangyong Motor, with the help of its Chinese partner SAIC Motor, SinoCast reported today.

SAIC, the former majority shareholder of Ssangyong Motor, has cooperated with Volkswagen for more than 20 years through the joint venture Shanghai VW, so the Chinese company expects to retain its holdings in Ssangyong via the cooperation with its German partner.

Geely may use Goldman funds for Volvo bid

Shanghai, September 24 (Gasgoo.com) Chinese auto maker Geely Automobile Holdings, whose parent is considering a bid for Volvo Car Corp, said on Wednesday that it may use some of the funds raising from the bond sale to Goldman Sachs Group Inc. -managed fund for acquisitions.

Geely said in a statement that it was selling bonds and warrants worth a total of 2.59 billion Hong Kong dollars (US$334 million) to GS Capital Partners VI Fund, a private equity fund controlled by the US investment bank. GS Capital Partners VI Fund will own 15.1 percent of Geely should it convert the bonds and exercise the warrants.

China to be a top 5 market of Lamborghini soon

Shanghai, September 24 (Gasgoo.com) China will become one of luxury sports-car maker Lamborghini's top five markets "very soon," possibly as early as 2011, chief executive Stephan Winkelmann told Reuters in a recent interview.

Lamborghini, a unit of Germany's Audi brand, owned by Europe's largest carmaker Volkswagen, could sell over 100 of its cars in China in 2011, compared to around 80 this year, Winkelmann said at the Frankfurt Motor Show.

Toyota plans new subcompact family car for China

Shanghai, September 25 (Gasgoo.com) Toyota Motor is planning to launch a new subcompact family car in China by 2015, Kyodo News reported yesterday, citing company officials. The car will be priced lower than Toyota cars put on sale so far.

The new subcompact family car in the 1,200-cc class will be aimed at first-time car buyers and positioned as the Corolla, which sold well as a popular model during Japan's high growth period in the 1960s, the officials said.

Ford starts building 3rd China plant for new Focus

Shanghai, September 25 (Gasgoo.com) Ford Motor started building a third Chinese plant today with its local partner Changan Auto in China's southwest Chongqing city, xinhuanet.com reported today. The new plant will mainly produce Ford's next-generation Focus cars.

The $490 million plant is built by Changan Ford Mazda Automobile Co., a joint venture of Ford Motor, Changan Auto and Mazda Motor. The plant, Ford's second in Chongqing and third in China, will produce 150,000 cars annually starting 2012, to boost Ford's China capacity to 600,000 units.