Guangzhou Automobile Group Co. will convert Gonow Automobile Co. into a wholly owned subsidiary that will build its Trumpchi-brand passenger vehicles.
Gonow is a 51-49 joint venture between GAC and Gonow's founder, Miao Xuzhong. Miao has agreed to sell its 49 percent interest to GAC for 262 million yuan ($40 million), GAC said last week.
After the deal, Gonow's assembly plant in the east China city of Taizhou will be improved to produce GAC's Trumpchi cars. The plant can build as many as 60,000 pickups, small crossovers and microvans a year.
GAC says the deal will ease the production bottleneck that limited Trumpchi production. The company's existing Trumpchi plant in the south China city of Guangzhou can produce only 200,000 vehicles a year.
In the first two months of this year, GAC sold 49,385 Trumpchi sedans and crossovers, up 166 percent from the same period last year.
GAC, headquartered in Guangzhou, also runs joint ventures with Honda Motor Co., Toyota Motor Corp., Fiat Chrysler and private Chinese light-vehicle manufacturer ZX Auto Co.
