Beijing Auto In Talks To Buy Chery Technologies

Shanghai, January 13, 2009: (Gasgoo.com) Beijing Automotive Industry Corp (BAIC) is in negotiations with Chery Automobile to buy two units of Chery's self-developed B-segment car models and related technologies, the Economic Observer reported on Monday, citing informed sources.

Senior officials from Chery Auto confirmed that BAIC is indeed holding talks with Chery about possible cooperation, but they have nothing to announce currently.

Industry analysts say such an agreement would mean BAIC paying at least 50 to 100 million yuan transaction fees for Chery, which is much cheaper than buying complete car development technologies from foreign automakers.

BAIC has planned to launch its self-developed SUV and sedan models to the market in 2010. It will build two crossover vehicle platforms and four passenger vehicle platforms, according to BAIC's new product strategy. As the time is pressing, BAIC is hoping to take advantage of Chery's B-segment car technologies to launch its own-brand cars.

On December 30, 2008, BAIC signed a deal with Beijing Automobile Assembly Co., Ltd. to restructure Beijing Automobile Works Co., Ltd. (BAW). BAIC will become a majority shareholder (51%) of BAW and thus make it a manufacturing base of crossover vehicles.

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