Changan Auto to purchase firms owned by AVIC

Changan Automobile Group will acquire several companies currently owned by Aviation Industry Corp of China (AVIC), in the latest sign that automobile industry consolidation is gradually coming to fruition. Changan Auto said Tuesday that it will give AVIC 23% of its stock in exchange for Harbin HF Automobile Industry Group, Jiangxi Changhe Auto and Harbin Dongan Auto Engine, the Wall Street Journal reported. It will also get the domestic stakes in joint ventures with Suzuki and Mitsubishi. Changan’s state-owned parent, China Weaponry Equipment Group, will hold the remaining 77% of the company. The acquisitions of Changhe Auto and Harbin HF will strengthen Changan’s position in the mini commercial vehicle market, where its Chongqing Changan unit is already the number two player. The restructured group is targeting sales of 2.6 million units by 2012. By 2020, it wants sales to reach 5 million units and produce own-brand, high-end vehicles.