Changfeng Motor to sell stake to Guangzhou Auto

• Source: The Global Times
• [10:06 May 21 2009]
• Comments

By Shi Jierui

China's Guangzhou Automobile will sign an agreement May 21 with Hunan Changfeng Motor Co to take a major stake, a source close to the matter told Hunan Xiao Xiang Morning Post.

Changfeng announced May 18 that it would restructure its assets, but details were not included in the announcement.

Media had reported Beijing Automobile Works was considered a strong rival to Guangzhou Automobile, but Beijing Auto's integration plan didn't appeal to Changfeng.

Xiao Xiang Morning Post said Guangzhou Auto is geographically closer to Changfeng which was more advantageous for both parties.

According to Reuters, Guangzhou Auto's stake in Changfeng is unlikely to exceed 30 percent, but this deal will make it the largest shareholder of the Hunan carmarker.

Chinese media anticipate a new wave of domestic auto asset restructuring.