Baoneng reportedly acquires stake of Changhe Suzuki

Shanghai (Gasgoo)-On May 21, Baoneng Group has assigned a team to enter into the base of Changhe Suzuki in Jiujiang, Jiangxi Province. In addition, Baoneng has reportedly determined to acquire stakes of Changhe Suzuki, but it hasn't disclosed the news yet by far, according to a source from Changhe Auto.

It is said that the cooperation between BAIC Group and Suzuki has already been defunct, because Suzuki Motor refused BAIC's requirement of introducing one new model in Changhe Suzuki per year, after BAIC reorganized Changhe Auto. 

Another source said that Baoneng Group has dispatched staff members to conduct due diligence in Changhe Auto at the end of 2017 with an aim to acquire Changhe Suzuki's Jiujiang-based factory and the manufacturing qualification of Changhe Suzuki passenger vehicles, and has reported to Jiangxi Provincial Government. As exposed by the person who briefed this matter, the abovementioned news will not be unveiled until both parties' senior executives permit. 

Changhe Suzuki has abandoned by its parent company Suzuki long ago. The JV's another parent company, Changhe Auto suffered substantial sales slide in the past two years. According to the data from China Passenger Car Association (CPCA), Changhe Auto saw YoY sales slump of 17.7% to 87,387 units in 2017. During the first four months in 2018, the automaker delivered 16,963 vehicles, slumping by 29.1% over the previous year.

On one hand, Changhe Auto posted sluggish sales growth. On the other hand, Suzuki Motor has no intention on adding investment. Therefore, Changhe Suzuki is in dire need of Baoneng to salvage its sales, an auto industry analyst said.

Baoneng Automobile was founded in March, 2017. On Dec. 21, 2017, Baoneng acquired 51% stake of Qoros with a total of RMB 6.63 billion. Several days ago, Baoneng Group was rumored to acquire stake of Chery Auto with a total of RMB 25 to 27 billion, and aims to be the biggest shareholder of the automaker. However, Chery Auto and Baoneng both denied the rumor later.

On May 15, Yao Zhenhua, chairman of Baoneng Group, together with other senior executives of Baoneng, visited German companies like Bosch in Stuttgart and also discussed the future cooperation and key technologies in alternative power, intelligent connected vehicles and new materials. One of the visit's purposes was to promote the establishment of Baoneng and Qoros's European technology center.