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SAIC to reshuffle Nanjing Auto's parts manufacturing business
Shanghai. January 29. (Gasgoo.com) - Shanghai Automobile Industry Corporation (SAIC) has worked out a plan to take care of auto parts-manufacturing business of Nanjing Automobile Corporation (NAC) after the two companies formed alliance at the end of last year, according to Shanghai Securities News.
The core auto parts business originally owned by NAC, including 17 auto parts suppliers, the logistics and service divisions, has formed a new company called Donghua Auto Industries Co. Ltd. SAIC has appointed Wang Qingyu, a top-level executive in SAIC group, to head Donghua.
SAIC hopes Donghua could achieve sale revenue of 15 billion yuan ($2.08 billion) in five years, said Lu Zhenxin, general manager of NAC's auto parts business. “It's not clear how long the asset restructuring will take. Maybe it'll take a few years," said an unnamed SAIC official.
In fact, NAC had prepared to sell its non-core assets before its tie-up with SAIC. Nanjing Yuejin Automotive Brake System Co., Ltd (Yuejin Brake), an auto parts production unit of NAC is now on the block. NAC aims to sell Yuejin Brake's 42.25 percent stake for $5.9074 million, but no deal has been reached so far.
Earlier this month, SAIC announced that it'll invest 8.5 billion Yuan (US$1.2 billion) in remodeling NAC in the next three years and increase its annual output of 500,000 units by 2012.
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