FAW accelerating overall listing to change automakers' seating arrangements

　　According to First Financial Daily, the announcements of FAW Group's two listed companies yesterday indicated that the pace of the overall listing of FAW Group suddenly accelerated. To the several major auto groups in fierce competition, the actions of FAW in capital market recently may change the competitive landscape.

　　Overall listing can raise tens of billions of public funds

　　According to the announcement, FAW Group is planning to restructure the main business and establish FAW Co., Ltd. as a main sponsor.

　　By all expectations, around the end of this year, FAW Group will gradually complete the strategic objectives of the overall listing.

　　Among China's three major auto groups, SAIC and Dongfeng Group, were already listed in Shanghai and Hong Kong as a whole. After listed, the two companies have been expanding increasingly. However, with the title the eldest son of the PRC, the way for the listing of FAW has been bumpy. A person in charge of China Association of Automobile Manufacturers holds opinion that to be listed is the need to change the lagged behind old system of state-owned enterprise under the market economy.

　　Sales in recent years showed that though had been leading the auto market; FAW Group was caught up by SAIC in 2008 and then fell behind Dongfeng and Chang'an. In the first half of this year, with a sales volume of 1,242,200 units, FAW has been relegated to fourth place behind SAIC, Dongfeng and Chang'an.

　　"Compared with SAIC and Dongfeng, FAW's disadvantage is in the capital market. In contrast, the FAW Group has a certain gap on the financial strength compared with SAIC and Dongfeng." Automotive analyst Jia Xinguang pointed out that once the overall listing of FAW becomes successful, the funds can be raised can reach at least tens of billions, which will provide significant financial support for leapfrog development of the FAW Group.

　　Independent brands become the focus

　　According to a mid-level executive, the independent brand R & D and production sections are most in need of funds presently. To develop independent brand is the top priority of the FAW Group.

　　FAW Group has had proposed to strive for independent brand profitability in an internal meeting in 2011.

　　In fact, FAW Group who is eager to regain the location of the leader is lay outing its brand line. Till 2012, in terms of independent brand sedans, FAW will launch 26 new models in the luxury car, high-end car M-class car and small cars four platforms.

　　Large product development plan requires huge capital investment. The overall listing is undoubtedly a good solution to the pressing need.

　　But to the point of view of the competitive situation, the FAW Group is about to complete the overall listing can not sleep secure.

　　From this year, all major automotive groups have increased input into their independent brand.

　　SAIC is brewing to increase shares to raise tens of billions of additional funds to bigger and stronger independent brand. Its two independent brands MG and Roewe will achieve leaps and bounds. Chang'an Auto has also formed R & D centers in eight places of four countries to accumulate energy for the development of independent brand. Even BAIC fell behind FAW is also carrying out domestic and international mergers and acquisitions to accumulate stronger power. With high profitability, Guangzhou Automobile Group is also rushing to the fore.

　　According to plan, by 2011, the total sales of FAW Group will top 2 million, of which sales of independent brand cars can reach one million and sales revenue exceed 300 billion Yuan. In accordance with the report in the first half of this year, the plan is expected to be achieved ahead of schedule.

　　Under the opportunity of overall listing, whether FAW can achieve leapfrog development need to be tested by the market.

　　(Translator: Yalong/Jessie)

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