Shanghai (Gasgoo)- Even though Chery won’t sell the group as a whole, it seems determined to streamline its businesses. Just several days after it succeeded in finding a buyer for its stake in Qoros, Chery managed to find a new strategic cooperation partner for its another subsidy.
On December 18, Chery Automobile signed an agreement with Yibin municipal government in Sichuan province. According to the agreement, Cowin Auto, a subsidy of Chery, will be moved from Wuhu, Anhui province to Yibin.
After the relocation, Yibin will have the independent license for manufacturing passenger vehicles (including traditional vehicles and new energy vehicles), and also the company’s name will be changed to Yibin Cowin Auto from Wuhu Cowin Auto.
Currently, Chery is still the artificial person of Cowin. According to news from Yibin government, the registered capital of Cowin has been increased to RMB 3.5 billion (about 532 million dollars). Chery has confirmed that Yibin has invested RMB 1.5 billion to Cowin. However, it is not clear how much stake Yibin will hold in Cowin. An insider from Chery revealed that it is also possible for the municipal government to hold 100 percent stake in the future.
After the relocation, Yibin Cowin will expand its production value to RMB 12 billion and the value of related industry will increase RMB 28 billion. The company will also offer 1,500 jobs.
Cowin was founded at the end of 2013 with a joint investment from Anhui Jiangbei Development Company, Chery Commercial and Wuhu Construction Investment Company. As a state-owned joint-stock automaker, the company's business covers R&D, manufacturing and marketing. The registered capital at that time is RMB 2 billion.
Ever since its establishment, Cowin relies heavily on Chery’s resources and production capacity. In 2015, Cowin delivered 62,000 vehicles, more than its annual target of that year. However, in 2016, the company sold 43,000 units and failed to achieve its annual sales target. For the moment, Chery’s performance in profit and capital is not powerful enough to breathe new life into Cowin. It seems reasonable for Chery to find a new strategic investor for Cowin.
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