CHONGQING, China — Chang'an Automobile Company said it plans to raise up to $586 million by selling stock. The company wants to use the money to fund expansion of its self-branded vehicle lineup. Chang'an is China's major minivan maker and a partner of Ford and Mazda.
The nation's third-largest auto group will issue up to 20 percent of its currently 2.3 billion outstanding shares, according to a statement filed with the Shenzhen Stock Exchange this week.
The proceeds of the additional share sale would be part of a total of more than $639 million that the firm has earmarked for production expansion, upgrading small engines and strengthening its engineering capability for cars under its own brand.
The company said almost $240 million will be used to increase capacity at its minivan plant. Another $174 million will be invested in a vehicle testing ground to enhance engineering competence, the statement added.
Production expansion and developing self-branded vehicles are priorities for Chinese carmakers after demand for small cars was fueled by stimulus measures launched by the Chinese government. The measures are continuing to boost vehicle consumption this year.
Chang'an's sales in January more than tripled to 72,886 units from a year earlier. The robust sales followed a 64 percent surge in its vehicle sales last year to total 1.36 million units.
Inside Line says: Chang'an makes some smart moves to expand while things are going well. — Vivian Jin, Correspondent
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