FAW Car to build wholly-owned subsidiary with registered capital of RMB50 million

Posted on 6/28/2019 10:23:17 AM

FAW Car Co., Ltd., a subsidiary of FAW Group in Changchun, Jilin, plans to set up a wholly-owned subsidiary with its self-owned fund of RMB50 million, according to an announcement the automaker released on June 25.
The new subsidiary, temporarily dubbed FAW Besturn Car Co.,Ltd, will have a business scope extending to cover such areas as the development, production and sales of automobiles and auto parts (including new energy vehicles and NEV-related batteries, electric motors and electric control units), smart devices as well as the vehicle maintenance, the sales of pre-owned cars, the car rental and mobility services.
In accordance with the announcement, the new subsidiary is built to serve FAW Car's overall strategic planning and China FAW Co.,Ltd’s demand over a material asset reorganization. 
Based on an asset reorganization scheme agreed in April, FAW Car would swap part of its assets (excluding the assets should be reserved) with FAW Jiefang's entire stake which is held by China FAW Co.,Ltd. Thus, the new subsidiary is designed to receive the assets to be transferred by FAW Car before China FAW Co.,Ltd finally take over them.
FAW Jiefang is a truck manufacturer wholly owned by China FAW Co.,Ltd, according to Tianyancha, a large data technology service company with a vast repository of Chinese enterprise information. The truck company had been crowned the champion in China for three consecutive years (from 2016 to 2018) by annual sales of heavy-duty trucks.
The completion of the aforesaid material asset reorganization may turn FAW Car's major business into development, manufacture and sales of CVs, some analysts said.
FAW Car saw its full-year revenue for the year of 2018 drop 5.94% year on year to RMB26.244 billion, while the yearly net profit attributable to shareholders of the listed company slumped 44.88% over the year ago to RMB155 million.

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