China's Guangzhou Automobile Industry Group Co. yesterday acquired its smaller home rival Gonow Automobile as China continues to consolidate its auto industry in a bid to create competitive home-grown auto groups.
State-owned Guangzhou Auto, which is a partner of Toyota and Honda, will own 51 percent of a new joint venture with Zhejiang-based Gonow, the firm said yesterday, without giving financial details.
Guangzhou Auto is China's sixth-largest auto group. The company sold 606,600 vehicles last year, while privately owned Gonow, which specializes in producing self-branded sport-utility vehicles, pickups and minivans, sold 48,000 units.
The acquisition is expected to help Guangzhou Auto strengthen its minibus business, said Zeng Qinghong, the firm's vice chairman.
"Guangzhou Auto lacks minibuses in its product mix," said Zhang Xin, an auto analyst at Guotai Junan Securities Co. "But it's still a challenge to boost market share and profit in the segment because of the strong domination of SAIC-GM-Wuling, Changan Auto and Dongfeng."
Other analysts said Guangzhou Auto, which sells vehicles mainly in south China, wants to grow in the east China region through the acquisition and take advantage of Gonow's idle output to boost its own production capacity.
Guangzhou Auto aims to boost sales to 2 million cars by 2015, which would help it join China's top auto groups such as SAIC Motor and FAW Group. It targets sales of 1.3 million units this year.
In May last year, Guangzhou Auto invested USD146 million to buy a 29 percent stake in SUV specialist Changfeng Automobile. It also formed a joint venture with Fiat.
State-owned Guangzhou Auto, which is a partner of Toyota and Honda, will own 51 percent of a new joint venture with Zhejiang-based Gonow, the firm said yesterday, without giving financial details.
Guangzhou Auto is China's sixth-largest auto group. The company sold 606,600 vehicles last year, while privately owned Gonow, which specializes in producing self-branded sport-utility vehicles, pickups and minivans, sold 48,000 units.
The acquisition is expected to help Guangzhou Auto strengthen its minibus business, said Zeng Qinghong, the firm's vice chairman.
"Guangzhou Auto lacks minibuses in its product mix," said Zhang Xin, an auto analyst at Guotai Junan Securities Co. "But it's still a challenge to boost market share and profit in the segment because of the strong domination of SAIC-GM-Wuling, Changan Auto and Dongfeng."
Other analysts said Guangzhou Auto, which sells vehicles mainly in south China, wants to grow in the east China region through the acquisition and take advantage of Gonow's idle output to boost its own production capacity.
Guangzhou Auto aims to boost sales to 2 million cars by 2015, which would help it join China's top auto groups such as SAIC Motor and FAW Group. It targets sales of 1.3 million units this year.
In May last year, Guangzhou Auto invested USD146 million to buy a 29 percent stake in SUV specialist Changfeng Automobile. It also formed a joint venture with Fiat.
