Beijing Auto, Guangzhou Auto wait for Fujian Motor's decision

By Shi Jierui

Chinese automakers Beijing Auto and Guangzhou Auto are competing to acquire Fujian Motor as each carmaker is trying to expand.

A person familiar with the matter told the Economic Observer that Fujian Motor's separate talks with Beijing Auto and Guangzhou Auto have reached a critical stage, and in a few months, Fujian Motor and the provincial government will decide which suitor to choose.

The contact explained Guangzhou Auto is a better choice financially, but Beijing Auto also has funding from the municipal government. Another person familiar with the issue told the Economic Observer that before Guangzhou Auto joined the race, Beijing Auto wanted to spend 500 million yuan ($73.2 million) to acquire Fujian Motor, but Fujian Motor thought Beijing Auto should pay more.

Guangzhou Auto is on a spending spree, having recently bought a 29 percent stake of Changfeng Motor which is a partner of Mitsubishi Motors; however the technology transfer agreement between Changfeng and Mitsubishi will expire at the end of June.

The article went on to say that if Guangzhou Auto can successfully sign the deal with Fujian Motor, it will continue its cooperation with Mitsubishi Motors, which also has agreements with Fujian Motor's Southeast Motor.