Chongqing Changan Automobile Co., Ford’s biggest Chinese partner, has said it will take over the US carmaker’s affiliate Jiangling Motors Group, in an expansion to qualify for receiving government incentives, Bloomberg reports.
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The report said that Changan, which makes Ford Mondeo and Fiesta cars in southwestern China’s Chongqing municipality, will put 450 million yuan ($54.4 million) cash into Jiangxi Jiangling Holding Co. Jiangling Motors will inject debt and 41 percent of publicly traded Jiangling Motors Corp., which makes Ford Transit vans, into Jiangxi Jiangling, said Changan’s spokeswoman Li Jun.
The Bloomberg report said that the takeover will bolster Jiangxi Jiangling’s capital tenfold to 1 billion yuan from 100 million yuan. It also creates an automaker that last year made 11 percent of the country’s vehicles, putting it within reach of a government-decreed size to qualify for speedier approvals for future products.
“The combination leaves Ford with one single unified partner, allowing it to seek a second partner if it wants to expand,” said Wang Zhihui, an analyst at Shenyin Wanguo Securities Co. in Shanghai, speaking to Bloomberg.
Changan and Jiangling may boost production by making more vehicles or acquiring other rival carmakers, Wang said.
