Shanghai (Gasgoo)- Chery Automobile released an announcement on Jan. 2, saying that it will transfer its subsidiary, Cowin Auto's 51% stake, which is worth RMB 2.494 billion, to Yibin Auto Industry Development Investment Co., Ltd. and Sichuang Yibin PUSH Group Co., Ltd., which will respectively hold 50.5% and 0.5% of Cowin's stake.
Sichuang Yibin PUSH Group Co., Ltd., a wholly-owned subsidiary of Wuliangye Group, has invested in a range of auto-related companies, such as NEV technology, auto parts and automotive moulds, etc. With the NEVs growing more popular, Wuliangye Group eyes the auto industry once again since it abandoned the industry seven years ago.
In fact, Wuliangye Group showed its ambition of marching into auto industry since the beginning of 2017. On Apr. 6, 2017, Qoros, a high-end auto brand of Chery, announced that it signed a strategic cooperation agreement with Yibin Municipal Government, Chery Auto and Kenon Holdings, planning to set up an auto project with a total investment of RMB 5.5 billion. The project is expected to have an annual production capacity of 500,000 units, including 200,000 NEVs. According to the person briefed on the matter, Li Shuguang, Chairman of Wuliangye Group, also attended the signing ceremony. It is said that it was Sichuang Yibin PUSH Group Co., Ltd. who signed the agreement with Qoros.
Early in 2003, Wuliangye Group forecasted that vehicle manufacturing will be profitable in China in the future. Unfortunately, though paying a lot of efforts, Wuliangye Group still failed to enter into the industry.
Cowin Auto, Chery's subsidiary brand targeting SUV segment for young generations, performed bad since its entrance into the market. In 2015, it sold 24,000 units, which just met its annual sale target. In 2016, it delivered 43,000 units, while its annual sales target was 62,000 units. What's worse, sales of the past ten months in 2017 reached less than 20,000 units, far below its annual sales target.
Henceforth, Wuliangye Group's acquisition of Cowin Auto will be a win-win situation for both parties. On one hand, with the support of Wuliangye Group's strong capital flow and the help from Yibin Municipal Governement, Cowin Auto is expected to be revived. On the other hand, thanks to the market basis and technology accumulation of Cowin Auto, Wuliangye Group finally fulfilled its dream to manufacture vehicles.
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