Beijing Automotive Industry Co yesterday denied a report that it is in talks to buy assets from struggling United States car maker Chrysler LLC to help in its bid to develop its own-brand cars.
Citing an unnamed source, China Business News?Monday said Beijing Auto has told Chrysler it's keen to buy engines, production lines as well as technologies. The report said the acquisition may help Beijing Auto to speed up the development of its self-branded vehicles and to grow overseas. The Beijing government may also offer financial support to help fund the purchase, it added.
But a spokesperson of Beijing Auto yesterday denied the report as he said the car maker was not in discussions with Chrysler about the acquisition, without giving further information. A company official from Chrysler China said she is not aware of the issue.
"Beijing Auto may show interest in overseas purchases at a time when it can get a better price from buying struggling international car makers, but it is not well positioned financially," said Wang Liusheng, an analyst at Merchants Securities Co. "The asset sale would also do little to solve Chrysler's problems."
Beijing Auto wants to boost the development of its own-brand vehicles and has just announced it would spend 1.68 billion yuan (US$246 million) to build an engineering facility. Its self-developed passenger car, the Beijing-branded vehicles, is scheduled to be launched next year.
Chrysler, which received a US$4-billion government loan, is seeking as much as US$5 billion in new loans to stay afloat.
(Shanghai Daily February 24, 2009)
