SHANGHAI (Reuters) – China’s Chery Automobile Co has raised about 2 billion yuan ($293 million) by selling a 20 percent stake to domestic private equity investors, the Wall Street Journal reported on Wednesday, citing people familiar with the situation.
The investors included Bohai Industrial Investment Fund Management Co and CDH Investments, the newspaper said.
Chery and the private equity companies could not immediately be reached for comment.
The newspaper quoted Chery spokesman Jin Yibo as confirming the size of the fundraising and as saying the company planned to use the money to continue its own development, not for pursuing overseas acquisitions.
Chery, China’s biggest indigenous car maker, earlier this year unveiled its mid- to high-end Riich G6 sedan that aims to take on more established rivals such as Toyota Motor (7203.T) in that lucrative market segment.
Several Chinese automakers, including SAIC Motor Corp (600104.SS), China’s largest automaker and a partner of General Motors Corp (GM.N) and Volkswagen AG (VOWG.DE), are keen to develop their own models, especially for larger, more profitable vehicles, and to move into overseas markets.
China’s home-grown automakers primarily produce small cars, which have recently enjoyed strong sales growth as Beijing implemented tax incentives for compact cars and rebates to rural buyers to bolster domestic demand.
While the global industry struggles with a severe downturn, China’s car market, now the world’s largest, has rebounded and posted record sales in recent months.
Chery said last month that it may boost its annual car sales target by 50 percent if the market recovery proves sustainable. [ID:nSHA374187] ($1=6.828 Yuan)
(Reporting by Fang Yan, Samuel Shen and Edmund Klamann; Editing by Jacqueline Wong)