GAC, Gonow establish JV

• Source: Global Times
• [18:18 December 09 2010]
• Comments

Guangzhou Automobile Group Co (GAC) signed a cooperation agreement with private automaker Gonow Auto Thursday and purchased shares of Gonow valued at 6 billion yuan ($901 million). GAC takes 51 percent of the equity and Gonow holds the rest.

GAC and Gonow are establishing a joint venture with a registered capital of 1.26 billion yuan, and the companies said that the annual production capacity of the new JV is expected to reach 500,000 units.

Former Gonow chairman of the board Liao Xuezhong is the president of the new joint venture called GAC Gonow.

GAC Gonow will focus on production of micro-cars, SUVs and pickups and by 2015,the company aims to raise its production capability and sales from 300,000 units to 600,000 units.

GAC mainly produces mid and high-end passenger cars, and the chairman of the board of GAC, Zhang Fangyou, told reporters that the addition of Gonow's micro-car will complete and rationalize GAC's product mix.

Gonow Auto is based in Zhejiang Province, and has three vehicle production plants, two marketing companies and seven auto-parts makers. It sold about 40,000 units last year.

Agency and Shi Jierui contributed to the story