SEOUL, (Reuters) – China’s Chery Automobile agreed to invest $75 million in South Korean automaker KG Mobility Corp through convertible bonds, KG Mobility said. If converted into shares, the bonds would give Chery a stake of about 10% in the company.
- “Chery has many manufacturing bases around the world. We believe these locations could become key areas for future cooperation between our two companies. For example, we could explore sharing global production capacity and collaborating across various aspects of manufacturing,” Zhang Guibing, president of Chery International, told reporters in Seoul.
- “We also see many other opportunities for cooperation, including distribution channels and even brand-related collaboration,” he said.
- Chinese automakers are increasingly partnering with established carmakers to make use of underutilised overseas factories.
- “One of our key objectives is, of course, to strengthen our presence in overseas markets,” said Zhang. Chery is China’s largest car exporter.
- Chery is actively exploring various options for entering the U.S. market, Zhang said, adding that it would need to comply with a wide range of U.S. laws, regulations and other requirements before doing so.
- KG Mobility is on track to launch a midsize SUV, codenamed SE-10, in January using Chery’s T2X vehicle platform. Gasoline and plug-in hybrid versions will be available for domestic and overseas markets.
- The company has no current plans to export the model to the U.S. market, but remains open to the possibility, KG Mobility Chairman Kwak Jae-sun said.
- KG Mobility, formerly known as SsangYong Motor, ranks behind Hyundai, Kia and General Motors in South Korea. The SUV maker sold more than 55,000 vehicles in South Korea and overseas in the first half of the year, with exports accounting for about 60% of total sales.
- The two companies also agreed to form a task force to explore cooperation in semiconductors, robotics, raw materials, steel and other areas, Kwak said.
Reporting by Hyunjoo Jin and Brenda Goh Editing by Ed Davies
