Changan Auto merges AVIC Auto operations

China South Industries Group, the parent of Changan Auto, says it has merged with the auto-making operations of Aviation Industry Corporation of China. This is the first merger and restructuring of auto businesses between the two state-owned giant enterprises.

China South Industries Group, the parent of Changan Auto, says it has merged with the auto-making operations of Aviation Industry Corporation of China.

Under the plan, Aviation Industry Corporation of China transfers its stakes of Changhe Auto, Hafei Auto, Dongan Power to the Changan Auto Group, a subsidiary of CSGC. In return, CSGC transfers it's 23 percent stake in the Changan Auto group to AVIC.

After the merger, CSGC will hold a 77 percent stake in the new Changan Auto Group. The auto-maker plans to double its mini-van production capacity to 1.2 million units from the current level in two years and triple that capacity to 1.8 million units by 2014.