Tianjin FAW Xiali Automobile Co. is to sell part of its stake in a JV with Toyota in order to fund new product development and restructuring, reports say.
Bloomberg reports that it plans to sell a 15 percent stake in its joint venture to parent China FAW Group in order to raise 2.5 billion yuan. The sales would reduce its holding in the three-way venture to 15% (FAW will then hold 35% and Toyota's 50% would be unchanged.
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Tianjin FAW plans to complete its restructuring by 2018.
Carmakers in China are gearing up for a period of possible sector consolidation as the market cools – in line with the Chinese economy – in 2017 and over-capacity becomes an issue for some, alongside insufficient scale economies. Additional costs due to more stringent emissions standards are also likely to hit domestic makers who don't have international operations over which to spread and amortise expensive powertrain fuel emissions technologies.
