Beijing Auto, GZ Auto vying for Changfeng stake

SHANGHAI, Aug 14 (Reuters) - Beijing Automotive Industry Co, a Daimler AG partner in China, and Guangzhou Automobile Group are vying for a stake in Chinese sport utility vehicle maker Hunan Changfeng Motor Co, sources familiar with the situation said on Thursday.

The talks could lead to Beijing Auto or Guangzhou Auto taking control of Changfeng, which is 16.07 percent-owned by Japan's Mitsubishi Motors Corp, one source with direct knowledge of the situation told Reuters.

Changfeng, based in central China's Hunan province, had explored possible equity ties with several potential investors including General Motors and Ford Motors since last year but discussions are now focused on the two Chinese auto makers, the source told Reuters.

A spokesman for Beijing Auto said he could not comment on the situation, while a representative for Guangzhou Auto could not be reached for comment. Changfeng declined to comment.

Changfeng has a market capitalisation of 2.1 billion yuan ($306 million) based on its early afternoon share price of 5.25 yuan.

"Changfeng's move to seek an outside investor has the backing of the Hunan government, which is eager to bolster its auto sector," said the source.

"Ceding control of Changfeng is not a problem for the local government but they have to pick the right partner."

Beijing Auto is the parent company of Beiqi Foton Motor Co and has a tie-up with Hyundai Motor Co, while Guangzhou Auto, parent of Denway Motors Ltd, is a China partner of Toyota Motor and Honda Motor.