Foton to sell 67% stake in Borgward to ride-hailing company, consultant
Automotive News China
Automotive News | 2019-1-11
Chinese truckmaker Beiqi Foton Motor Co. agreed to sell a 67 percent stake in Borgward, the German SUV brand it revived four years ago, to two domestic companies -- ride-hailing provider Ucar Inc. and consulting firm Changsheng Xingye Enterprise Management Advisory Co. |
The deal, priced at 3.97 billion yuan ($580 million), was approved by its board this month, Shanghai-listed Foton said.
The deal is aimed at easing the financial burden unprofitable Borgward has placed on Foton, a subsidiary of state-owned Chinese automaker BAIC Group Corp.
Borgward, once Germany's third-largest automaker, was liquidated in 1961. Foton purchased the rights to the Borgward brand in 2014.
Under Foton, Borgward has launched two gasoline-powered crossovers, the BX7 and BX5. In May, the battery-electric version of the BX7 went on sale in China. The vehicles are built at Foton's plant in suburban Beijing.
Borgward¡¯s sales have been limited. In the first 11 months of 2018, the brand delivered 30,620 vehicles, according to the China Passenger Vehicle Alliance, a Shanghai consultancy.
The brand racked up a loss of 1.6 billion yuan in the first eight months of 2018, after losing 2.7 billion yuan in 2017.
The deal also enables Ucar to use Borgward vehicles to expand its ride-hailing fleet and to supply vehicles to its affiliate, Car Inc., a leading car rental and leasing company in China.
Ucar, established in the Chinese capital of Beijing in 2002, operates in more than 300 domestic cities. In the first three quarters of 2018, it booked 4.9 billion yuan in operating revenue and 280 million in net profit, Uncar said on its website.
Changsheng Xingye was incorporated in December in Xia¡¯man, a coastal city in east China¡¯s Fujian province, with registered capital of 2 billion yuan.
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