FAW speed up group listing to change

　　According to First Financial Daily, the two listed subsidies of China FAW Group’s reported together yesterday issued announcements publicly, indicating that the pace of the FAW group to be listed as a whole suddenly accelerates. To these major domestic auto groups, this big jump of FAW in the capital market may change the situation.

　　The success of group listing can raise 10 billion funds

　　FAW Car Co and Tianjin FAW Xiali Automobile Co, the group"s two listed subsidies, said in separate statements filed with the Shenzhen Stock Exchange that the parent plans to restructure its main business and establish a holding company, transferring its holding in the two sub-units to the planned new company.

　　By all expectations, by the end of this year, FAW Group will gradually complete the strategic goal of single group listing.

　　Among three major Chinese auto groups, SAIC and Dongfeng Group has already been listed as a whole in Shanghai and Hong Kong respectively, which has drove to accelerated expansion. However, shrouded with the title of the son of the PRC, the journey of FAW Group’s single group listing has been bumpy. One staff of China Association of Automobile Manufacturers expressed that the single group listing of FAW demonstrates the urgent demand for old state-owned enterprises to change their backward organization system under the market economy system.

　　Sales in recent years show while leading all the way previously, since in 2008 surpassed by SAIC, FAW Group then outstripped by Dongfeng Group and Changan successively in 2009. Till the first half of this year, with a sales volume of 1,242,200 units, FAW has been relegated to fourth place.

　　“Compared with SAIC and Dongfeng Group, the disadvantage of FAW lies in the capital market. In contrast, FAW Group has a certain gap with these two companies in financial strength.” Automotive analyst Jia Xinguang pointed out that the success of FAW Group’s full listing can at least raise tens of billions funds, which will provides important financial support for the leapfrog development of FAW Group.

　　　The competition in independent brands is the focus

　　According to one mid-level executive within the FAW Group, the development and production of self-owned brands is most in need of funds and to develop self-owned brands is the top priority of the FAW Group currently.

　　FAW Group has proposed in one internal meeting to strive to make its self-owned brands profitable in 2011.

　　In fact, FAW Group who is eager to regain the leader position, is preparing for a new layout of brands, that is to launch 26 new or facelifted models o within the four platforms L luxury car, H high-end car, M senior car, S small car. The large product development project needs huge capital investment while the single group listing will undoubtedly can be used to meet urgent needs.

　　However, from the competitive situation, FAW Group just cannot lay aside all anxiety and rest content. This year, the major auto groups have all increased input into their self-owned brands. SAIC is brewing to raise 10 billion of funds to enlarge and strengthen its self-owned brands, and its two independent brands MG and Roewe will achieve leapfrog development. Changan Auto has also formed R & D centers in eight cities of four countries to accumulate energy for the development of independent brands. Even Beiqi lagged behind FAW, is consolidating its own power through domestic and international mergers and acquisitions. Guangzhou Automobile Group with leading profitability is also eyeing opportunities to surpass.

　　According to planning, till 2011, the total sales of FAW Group should exceed two million, of which independent brands sales achieve one million and sales income reach above 300 billion Yuan. In accordance with the sales of the first half of this year, the target is expected to be finished ahead of schedule.

　　By the chance of group listing, whether FAW can achieve leaps will be tested by the market.

　　(Translator: yalong/Jessie)

　　See original Chinese report Please click:

　　http://auto.sohu.com/20100716/n273546195.shtml