AVIC launches auto company in Beijing

Mar. 16, 2009 (China Knowledge) - State-owned Aviation Industry Corp of China (AVIC), the country's leading aviation manufacturer, launched an auto company in Beijing on Mar. 13, the First Financial Daily reported.

The newly-established auto company will be integrated with assets from several domestic automakers including Jiangxi Changhe Automobile Co Ltd<600372>, Hafei Motor Co Ltd and Harbin Dongan Auto Engine Co Ltd<600178>, said AVIC, adding that the auto company may be listed in the future.

AVIC said it expects its auto unit to achieve sales revenue of RMB 26 billion and secure a market share of 3.5% by 2011, with 400,000 vehicles and 800,000 engines being sold every year. Moreover, it aims to increase the sales revenue to RMB 50 billion and the market share to 5.5% by 2013.

The new auto unit will also coordinate the development of Changhe Auto and Hafei Motor, which are both engaged in the manufacturing of small commercial vehicles, according to AVIC.

In addition, AVIC will also spin off the auto assets from AviChina Industry & Technology Co Ltd<2357>, a listed unit of AVIC, into the new auto unit.

AVIC also said that it is still looking for partners, including PSA Peugeot Citroen S.A..