BEIJING May 15 The parent of Dongfeng Motor
Group Co, China's second-largest automaker, will take
an over-40 percent stake in Fujian Motor Industry Group, a local
newspaper said on Wednesday, the latest consolidation in the
country's fragmented auto market.
A deal, expected to be signed on Thursday, will allow
Dongfeng to acquire Fujian Motor's passenger car business, China
Business News said, citing an unnamed source at Dongfeng.
Fujian Auto's bus business and its three-way van
manufacturing venture with Daimler AG and China Motor
Co will not be affected, it said.
Officials at Dongfeng, which operates car ventures with
Nissan Motor Co, Honda Motor Co and PSA
Peugeot-Citroen, and Fujian Auto could not be reached
Fujian Auto, which is 25 percent held by Taiwan's China
Motor, is a tiny player with annual capacity of 150,000
vehicles, according its website.
However, it has been an acquisition target of several
Chinese automakers, including BAIC Group, eager to establish a
presence in southeastern China, where the firm is based.
For years, the central government has been pushing for
consolidation in the country's auto industry. However, it has
been met by little success so far due to strong opposition by
local governments which are eager to boost their local economy.
There are still over 70 registered automakers in the
country, according to the China Association of Automobile
Consolidation is seen becoming more important as the market
has now settled for single-digit growth after years of breakneck
Changan Automobile Group took over microvan maker Harbin
Hafei Automobile Industry Group in 2009 and Guangzhou Auto took
control of small pickup truck maker Gonow and Changfeng
Automobile, which has a 50-50 manufacturing and sales joint
venture with Japan's Mitsubishi Motors Corp in Hunan
province in central China.