Japan's Sumitomo Corp will acquire a 49 percent stake in a car trading unit of Baosteel Group Corp, in what could be the first foreign firm to enter the Chinese auto dealership market with cross-provincial operations. 

The Japanese trading firm and Baosteel will boost investment in Baosteel Auto Trading Co, forming a new venture with paid-up capital of 160 million yuan (US$20.5 million). Upon completion, Baosteel will hold a 51 percent stake and Sumitomo the balance. The statement didn't specify how much money the two companies would inject into the venture respectively.

The venture will set up franchised sales outlets, second-hand vehicle transaction and auto leasing operations via direct investment, mergers and acquisitions as well as buying stocks in other dealers. The Baosteel unit has seven dealerships in Shanghai and Zhejiang, Jiangsu, Guangdong and Jiangxi provinces.

The vehicles it sells include those made by big names like Toyota Motor Corp and Audi AG. It sold more than 3,000 cars last year. Through the investment, Sumitomo could also become the first foreign firm to have an interest in a car dealership which offers different auto brands in China.

Unconfirmed reports said last month that financial titan Citigroup Inc has bought into an authorized dealer of BMW AG in Beijing to tap the mainland luxury car market.

Passenger vehicle sales including cars, sport utility and multipurpose vehicles and mini buses for the first 11 months hit 4.44 million units, a rise of 26.4 percent year on year.

Source:佚名