Shanghai Automotive Industry Corporation (SAIC)’s outright purchase of Nanjing Automobile Group Corporation (NAC) has been completed. Arrangements are also proceeding to turn Nanjing-Fiat’s now defunct JV plant into an SVW facility.
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With completion of the purchase, SAIC will reportedly begin substantial assets restructuring. First it will turn Nanjing Fiat, a subsidiary company of Nanjing Automobile, into a new production base for Shanghai Volkswagen (SVW), a SAIC company.
SAIC is planning to spend CNY8bn in Nanjing Automobile in the coming three years, lifting its yearly output to 300,000 units, three times its current production capacity.
Nanjing Fiat will serve as Shanghai Volkswagen’s Nanjing plant: Shanghai Volkswagen Najing Production Base.
The new production base will be operational in mid-2008 and is expected to roll out 60,000 units this year. And it aims to boost its production capacity to 100,000 by 2010.
Nanjing Automobile ended the partnership with Fiat in 2007 after it signed the cooperative agreement with SAIC.
“Preparations for Shanghai VW to assemble its current car models at Nanjing Fiat are ongoing,” SAIC said in a statement posted on its website.
In January, the first batch of 54 staff from Nanjing Fiat received training at SAIC, the statement added.
Shanghai VW will pay CNY1.5bn to SAIC for the Nanjing Fiat assets.
Fiat has signed a cooperative deal in China with Chery.
