According to a Dow Jones report, Tianjin Automotive Xiali Co. has received government approval for the transfer of a controlling stake in Tianjin to FAW from Tianjin’s previous parent.
First Automotive Works, one of China’s top three carmakers has therefore taken a controlling 50.98% stake in Tianjin Automotive Xiali Co. The consolidation move is being interpreted as a reaction to more competitive market conditions and China’s entry to the WTO.
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The Chinese government has said in the past that it wants to create two or three globally competitive car producers to strengthen a fragmented industry.
Toyota has a venture with Tianjin Automotive Xiali with which it plans to make 30,000 small cars annually in China, basing the first Chinese-built Toyota model, the 1.5-liter T-1 compact on sale in October, on the Toyota Vitz/Yaris/Echo compact.
