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BAIC to be China Car Rental’s Largest Shareholder as SAIC Motor Quits


SAIC Motor said today that it will not be buying a controlling stake in China Auto Rental due to newly emerged circumstances.

“What we focus is not only acquiring the firm but also its operations after the acquisition is completed. We terminated the transaction in time to protect our shareholder’s interest，” said Chen Hong, chairman of SAIC Motor in a shareholder’s meeting today. 

A few hours later, the parent firm of China Auto Rental said it is to sell no more than 443 million shares worth HKD1.37 billion to a unit of BAIC. The Beijing-based car-maker is expected to hold 20.87 percent of the car rental firm after the acquisition is completed.

For automakers, having a ride-hailing or rental platform on the side is becoming an important driver of sales, said Zeng Zhiling, general manager of LMC Automotive Consulting.

China Car Rental’s revenue was CNY1.325 million in the first quarter, a decrease of 28.3 percent, and its net losses amounted to CNY188 million due to the Covid-19 outbreak. However, this car rental firm had revenue of CNY7.69 billion with a fleet of 148,894 cars scattered in over 1000 branches all over China. 

The Shanghai-based SAIC Motor had said on July 2 that its unit would pay up to HKD1.9 billion (USD245 million) for no more than 613 million CAR shares. It was planning to purchase a 29 percent stake in China Auto Rental. 

BAIC Group penned an agreement on June 1 to purchase a 21.3 percent of the vehicle rental company's shares, which would also result in a controlling stake. 

The vehicle rental company's equity price has plummeted this year amid the accounting scandal of Luckin Coffee, whose former chairman Charles Lu used to chair CAR too.


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