Jiangxi Changhe Auto likely to make aircraft parts

Shanghai, July 15 (Gasgoo.com) Jiangxi Changhe Automobile Co., Ltd. announced its future restructuring scheme on July 14, 26 days after its trading in Shanghai's stock market was suspended for an asset reorganization by its controlling shareholder, AviChina Industry & Technology Co., Ltd. under China Aviation Industry Corporation II (AVIC II), reported Beijing Times today.

According to the plan, Changhe Auto will give up its auto-making business and shift to the aircraft manufacturing sector, perhaps making aircraft parts. All its auto-making assets, including the 41% stock in the joint venture Changhe Suzuki and 100% stock in the Hefei Changhe facility, will be evaluated and transacted with two manufacturers of aircraft electromechanical components.

Meanwhile, the new China Aviation Industry Group Corporation emerging from AVIC I and AVIC II, China's two aircraft makers, will re-arrange their auto-making businesses. Currently, AVIC II has three auto-making subsidiaries (Hafei Auto, Changhe Auto, Shaanxi Hanjiang Auto) and two engine manufacturers; AVIC I has the Silver Bus, Jincheng Motorcycle and Chengfei Auto Die.

The widespread rumor that Changhe Auto would be acquired by Beijing Auto or Changan Auto was spiked in May by Changhe Auto's general manager, who said his company would be an important auto-making part of the new China Aviation Industry Group Corporation. In its latest five-year plan, Changhe Auto vowed to reverse in 2008 its several years of money-losing and aimed to raise its vehicle sales from last year's 107,700 units to 400,000 units by 2010.

Changhe Suzuki has an annual capacity of 100,000 units. Its product portfolio includes the Ideal / Ideal II subcompact cars, the Friend (called the Fuga in Mexico) tiny mini-van, the Freedom mini-van and mini-truck.

AVIC I and AVIC II supply components for Airbus' and Boeing's latest models, including the double-decker A380 jumbo jet and the 787 Dreamliner. AVIC I, which owns Xi'an Aircraft International Corp, makes fighter planes and bombers.