* BAIC acquires $2.9 bln credit line - BOC
* BAIC has said might still be interested in Saab
(Adds BAIC reaction, analyst comment, background)
BEIJING Dec 4 Beijing Automotive Industry
Holding Corp (BAIC) has obtained a 20 billion yuan ($2.93
billion) line of credit from the Bank of China
(601988.SS)(3988.HK), the bank said on Friday.
BAIC has said it might still be interested in buying General
Motors' [GM.UL] Saab unit, after a consortium led by tiny Swedish
luxury car maker Koenigsegg, pulled out of talks last week. BAIC
was a member of that consortium.[ID:nPEK20085]
BAIC declined to comment.
Major Chinese carmakers are hungry for money to upgrade their
technologies, expand production scale and eventually tap into the
global market, and it is reasonable for Chinese banks, controlled
by the government, to provide them with liquidity.
The credit that BAIC, China's fifth-biggest carmaker, gets is
seen enough to boost the production scale of the Beijing-based
automaker, which does not even have its own car brand.
Its four-year old Mercedes-Benz car venture with Daimler AG
(DAIGn.DE) broke even last year and its tie-up with Hyundai Motor
Co (005380.KS) has a long way to go before catching up with top
players in the market such as Volkswagen AG (VOWG.DE).
"Twenty billion yuan is more than enough for production
expansion," said Li Chunbo, an analyst with CITIC Securities.
A day earlier, Chinese car and battery maker BYD Co Ltd
(1211.HK) received 15 billion yuan in credit from the Bank of
China, to expand its investment in battery, new energy and car
Several Chinese auto companies are keen to break into foreign
markets and are aggressively developing their own brands in a bid
to move up the value chain from the small, low-priced segment.
Geely, the Chinese carmaker picked as the preferred bidder
for Ford Motor's (F.N) Volvo unit, is said to be seeking at least
$1 billion in loans from Chinese banks, including Bank of China,
to finance its $1.8 billion bid. [ID:nHKG130867]
(Reporting by Michael Wei and Simon Rabinovitch; Editing by Ken
((email@example.com; +8610 6627 1003; Reuters
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