Automotive News Europe/Reuters, 23rd June, 2010
SAIC Motor, China’s biggest automaker, may raise nearly 10 billion yuan ($1.47 billion) in its planned share placement to help shore up its passenger car business, a major Chinese financial newspaper said.
SAIC Motor, the maker of MG and Roewe sedans, has invested more than 4 billion yuan in its MG series of models and plans to invest at least 6 billion yuan to boost the brand’s recognition, the 21th Century Business Herald quoted an unnamed source as saying.
SAIC Motor, which operates manufacturing ventures with General Motors and Volkswagen Group, is virtually the only Chinese automaker that has made some inroads in China’s lucrative medium-to-higher end segment, still dominated by locally made Buick, Passat, Accord and Camry models.
Over the weekend, SAIC Motor said it was planning a private placement of new shares but did not provide further details. Trading of its Shanghai-listed shares were suspended from Monday. Proceeds from the share placement will also help fund the development of green vehicles, the newspaper said.
Its shares ended down 3.8 percent on Friday, when they last traded, to 12.05 yuan. The stock has dropped about 40 percent this year, underperforming a 23 percent fall in the benchmark Shanghai Composite Index.
Vehicle sales in China, the world’s biggest auto market, are expected to return to a more moderate growth rate after breakneck expansion in 2009. However, SAIC Motor President Chen Hong has said he was confident the company would achieve its annual target of selling 3 million vehicles this year.
[Source: Automotive News Europe]
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