10 September 2009

China looks at high-end auto companies

China auto companies seem to want more involvement with upscale car brands as China's Geely Automotive's parent wants to bid for Ford's Volvo Car Corp. and Beijing Automotive Industry Holdings signed a deal to become a minority stakeholder in Koenigsegg Group AB's takeover of Saab Automobile from General Motors Corp.

In terms of the Geely move, it could give it access to Volvo technology it needs to upgrade its cars.

Gui Shengyue, chief executive of Geely’s privately held parent, Geely Holding Group Co, said the company is waiting for Ford to decide whether to sell the Swedish carmaker.

Rather than merely taking a stake in Volvo, Geely’s parent would seek full ownership, Gui said, adding Ford will make a decision on whether to sell Volvo within a month.

Geely, which once sold the cheapest cars in China, has been upgrading its models to tap China’s increasingly affluent drivers.

In terms of the Saab stake, Koenigsegg officials said the Chinese automaker has signed a memorandum of understanding to become “a non-controlling minority shareholder in Koenigsegg Group.”

Koenigsegg has been looking for additional financing to complete its takeover of Saab. It said the deal with BAIC will be completed later this year.

“We are now in a position to go ahead without any governmental financing,” said Koenigsegg Chief Executive Christian von Koenigsegg.

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