SAIC plans to build 50% to 50%

　　As a brand with relatively fewer customers in China, Subaru, the automotive manufacturing division of Fuji Heavy Industries Group (FHI) has been a focus for Chinese auto enterprises to pursue recently. It is reported that five Chinese auto enterprises including SAIC, FAW, Beijing Automotive, Chery and Jiangling Motors Company (JMC) seek to achieve a joint venture with Subaru. Since imported into Chinese car market in 2004, sales of Subaru have been in rapid growth in recent two or three years, with sales soared to 35,000 units in 2009 and vehicle population reached 100,000 units in China. Annual sale of 30,000 units is commonly seen as the number threshold for localization in China, and a leader at Suburu China once said they would consider making Subaru in China if sales reach certain scale. As a result, news that Subaru will be made in China is constantly reported.

　　A person who is close to the situation told reporter that Ye Yongming, vice president of SAIC and his team went to Japan talking about joint venture with Subaru on July 16, 2010. According to the person, SAIC has a strong a desire to build a joint venture with Subaru. During the negotiation, SAIC insisted on taking 51% stake in the joint venture, and finally it was lowered to 50% to 50% shareholding structure.

　　It is said that Subaru has three regional distributors in China. One of them is Shanghai Anji Subaru, but Shanghai Anji Subaru is wholly owned subsidiary of SAIC and relationship between management team at SAIC is close to Subaru.

　　China became the world’s largest auto production country and consumer market in 2009. Under such circumstance Chinese auto enterprises in increasing numbers seeks to be stronger and more powerful. Considering that most international first class auto brands have accomplished their layout in China, it is natural that second class brands such as Subaru that also have a certain brand image and technical characteristics are being pursued by Chinese auto enterprises eagerly.

　　Currently, Chery and JMC are unlikely to achieve a joint venture with Subaru. Thanks to relationship with Toyota which is a big shareholder of Fuji Heavy Industries Group, and Tianjin also expects localization of Subaru can be in Tianjin, FAW has become a hot candidate for a joint venture with Subaru.

　　However, recently it was reported that BAIC also hopes to cooperate with Subaru, making the prospect of which Chinese auto enterprises can build partnership with Subaru more complex. On this thing, Subaru responded very cautiously saying that news about joint venture is just rumor. It is said that Subaru tried to make its cars in China as early as 1992. Fuji Heavy Industries Group once cooperated with China National Guizhou Aviation Industry( Group), which has a military background, and introduced its micro-cars into China by the ways of technical cooperation. After failure in the early stage, Fuji Heavy Industries Group increased its investmen and invested 450 million yuan into Guizhou Yunque as well as sent management personnel to that company. However, these efforts didn't changed the fact of low sales of Gzuihou Yunque. Finally Fuji Heavy Industries Group chose to quit. (Translator: Qinghua Wade)

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　　http://auto.sohu.com/20100727/n273787251.shtml