On Nov. 10th, 2009, China Ordnance Equipment Group Corporation(COEGC) and Aviation Industry Corporation of China (AVIC) held a red-carpet signing ceremony about recomposing with Chang'an Automobile Group in the Great Hall of People, which start a powerful reorganization of China’s automobile industry. AVIC transferred its stakes in five production units to China Ordnance Equipment Group Corporation's wholly owned subsidiary, Chang'an Automobile Group. Wu Bangguo, the member of the standing committee of the political bureau and the Chairman of the Standing Committee of the National People's Congress, Li Keqiang, the member of the standing committee of the political bureau and the vice premier of the State Council made important instructions separately to congratulate this successful reorganization.
Xu Bin, the general manager of COEGC and Lin Zuoming, the general manager of AVIC signed the agreement on behalf of their group.
Wan Gang, the vice president of CPPCC and the minister of ministry of science and technology, attended the meeting and made an important speech. Leaders of the National Development and Reform Commission, MIIT and SASAC addressed the meeting separately. Ministers of related departments, leaders of local governments, ten major military industry group, four major banks, leaders of major vehicle makers and main joint venture partners met in Beijing to witness this historical moment.
According to the agreement, Chang'an Automobile Group, the parent firm of Ford's Chinese partner, Chongqing Chang'an Automobile Co Ltd, will acquire Harbin Hafei Automobile Industry Group and Jiangxi Changhe Automobile from AVIC.
The takeover, between the two State-owned military-turned-civil enterprises, would also involve AVIC's parts company Harbin Dong'an Auto Engine Co, together with joint venture Harbin Dong'an Mitsubishi Automotive Engine Manufacturing Co, and Changhe Auto's joint venture Changhe Suzuki Automobile Co.
The COEGC will transfer 23 percent of its stake in Changan to the AVIC for AVIC's stakes in its auto units including Harbin Hafei Automobile Industry Group, Changhe Automobile, Dongan Power, Changhe Suzuki and Dongan Mitsubishi. The COEGC will take 77 percent of stakes in the new auto firm and the AVIC will hold 23 percent.
The successful takeover has been the biggest one in China’s automobile industry during the recent years. The new product series of Chang'an Automobile Group will be more perfect and its strategic layout will be optimized more deep. The new Chang'an Automobile Group have nine production bases in Chongqing, Heilongjiang, Jiangxi, Jiangsu, Hebei, Anhui, Shanxi, Guangdong and Shandong to produce cars. The new Chang'an Automobile Group also have 21 car factories and 27 directly leading companies. Annual production capacity of car and engine achieved 2.2 million. And the new Chang'an Automobile Group also have foreign bases in Malaysia, Vietnam, Iran, Ukraine and etc. Chang'an Automobile Group’s production bases covers the biggest area in China’s automobile groups. The build-up effect of advanced resources in China’s automobile industry can be enlarged fully and effectively.
This takeover will make Chang'an top Dongfeng Motor as China's third-largest automaker, only behind SAIC Motor Group and FAW Group, with sales in the first 10 months of 2.17 million and 1.56 million, respectively.