(Yicai Global) May 7 -- Chongqing Changan Automobile Co., one of China’s biggest carmakers, plans to inject CNY250 million (USD39 million) into its cash-strapped Russia subsidiary to deleverage and increase its production capacity, while turning the unit into a flagship of the company’s Commonwealth of Independent States, CIS, and Eastern European operations to further foray into the region.
The cash injection will help solve the subsidiary Changan Automobile Russia Co.’s liquidity shortage issue by improving its debt to asset ratio and operational capacity, the company said in a statement. The move will not affect the shareholders' interests and the company’s other businesses, it added.
Changan Automobile Russia plays an important role in the parent company’s foray into the CIS and East Europe, the statement said, adding that the capital injection will help Changan Automobile continue with its strategy in Russia and achieve sustained development in the region.
Changan Automobile designs, develops, manufactures and sells passenger cars, microvans, commercial vans and light trucks. The Changan CS35 is built in Lipetsk region of Russia since 2016 and the passenger model comes with a 5-year, 150,000 km service guarantee.
Changan, which means ‘lasting safety,’ is the local partner of Ford Motor Co. in China. The firm has vowed to cease sales of combustion-engine cars, starting in 2025, and fully electrify all of its new product lines. Last month, it teamed up with a unit of Tencent Holdings Ltd., Tencent Dadi Tongtu Technology Co., to set up a joint venture to make smart and connected vehicles in a USD31.4 million deal.
Editors: Emmi Leine, Mevlut Katik