GAC Group, the sixth largest auto group in China, had thrown RMB 7.8b into the buyout of GAC Gonow, GAC Hino and GAC Changfeng, but unforeseen circumstances interrupted the plan.

 

GAC Gonow produced only one car in April and news comes around that production will be suspended. In fact, since GAC’s buyout of Gonow, Gonow is facing the acceleration of being marginalized. GAC Gonow produces only 11,400 units in 2015, decreasing 55.43%. The sales and production volume come at 1,325 and 393 units in the first four months of 2016, decreasing 72.8% and 89% respectively.

 

Announcement on May 10th comes that GAC Hino will be dissolved for consecutive losses. Data shows that the unaudited total asset, net asset and total profit of GAC Hino come at RMB 207,101,700, -3,934,600, and -10,068,000 respectively. The sales volume for the four months in 2016 is 437 units, decreasing 52.84%. The April sales volume is 181 units. Considering the above performance, analysts are quite optimistic towards GAC Hino’s bankruptcy.

 

News comes around that Changfeng Auto is considering buying back 10% shares of GAC to achieve independence. In fact, since GAC’s buyout in 2009, Changfeng Auto has not achieved great developments, but instead, the stripping-off of good assets leaves only a shell company.

 

The buyout failure seems to have no influence on its global strategy. Foreign media reports on May 18th that, GAC Group will become No.1 Shareholder of Fiat-Chrysler. The joint-venture company GAC-Fiat Auto was established in 2010 and renamed in January, 2015, with GAC Group holding 50%, Chrysler APAC holding 40% and Fiat holding 10%. The holding structure was changed to Fiat-Chrysler holding 21.7%, Fiat-Chrysler APAC holding 18.3% and Fiat-Chrysler Italy holding 10% in November, 2015. Insiders say the fast growth of GAC-Fiat may add great probabilities to the cooperation.