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SHANGHAI, China - the largest automaker in China, China FAW Group Corp. absorbs small car maker Tianjin Automotive Xiali Co.
FAW, or First Automotive Works, is the largest manufacturer of Chinese brand cars Now it has taken a 51 percent stake in Tianjin this mother company, Tianjin Automotive Industry Corp.
The agreement is the largest merger to date between Chinese car companies It gives FAW, which specializes in high-end sedans, access to a partnership with the largest car company Toyota Motor Corp. Japan.
Tianjin has signed a 50-50 joint venture with Toyota in 2000 they started manufacturing compact cars Xiali brand in October.
FAW had been in talks with Toyota on an agreement to give access to the Japanese automaker in the market for Chinese history luxury cars.
FAW Tianjin absorbs and troubled debts for free, since the government owns in the end the two parent companies.
FAW also takes over 75 percent from Tianjin to Tianjin Huali Auto, which makes minicars.
Tianjin Xiali should cut about 75 percent of its 40,000 employees over the next two years and reduce its production company lost 87 million yuan May 10 million last year and ended up with debts 4 1 billion 496 million yuan.
Toyota had pushed for a restructuring before investing more money in Tianjin FAW Toyota and will now build a second plant, develop a new luxury FAW car model and make car parts for LandCruiser four-wheel drive Toyota in China.
FAW sedan makes Hong Qi, popular with Chinese leaders and dignitaries.
Tianjin Automotive Industry had 85 percent of its subsidiary Tianjin Xiali Xiali stock is traded on the domestic market share, open to international investors.
Its shares opened more Monday, but a large decline in Asian stock markets saw set Jan. 03 percent below 6 70 yuan in morning trading.
Most of the largest automakers in Japan sought to expand production in China, where labor, land and raw material costs are cheaper history.
The Chinese government is also preparing state enterprises to compete under the rules of the World Trade Organization.
According to a report in business weekly publication, he pushed three largest Chinese car companies - FAW, Shanghai Automotive Industry Corp. and Dongfeng Motor Corp - to buy the weakest automakers.
China FAW absorbs society smallcar June 17, 2002, china, business, Automotive Industry Corp..