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Chery to stay away from overseas buys: report

(Agencies)
Updated: 2009-12-15 16:31

Chery Automobile, China's largest indigenous car maker, will basically stay away from overseas acquisitions even though it has been approached repeatedly, its chairman said on Tuesday.

"We have been offered many fancy proposals (by investment bankers). Their business is to buy and sell," Yin Tongyao said in an interview published on Sohu.com, a Chinese Internet portal.

"They want you to get married today and split the next day, this is typically what investment bankers do...and we won't be hoodwinked."

Yin also denied overseas media reports about Chery's purchase of a Fiat car plant on the Italian island of Sicily.

"I was told that foreign media said we had bought a Fiat plant. There is no such thing," Yin was quoted as saying.

Italy's La Repubblica newspaper had reported that Chery was in talks to take over the Fiat car factory.

Industry sources said that they were "bemused" and did not see it making sense for Chery, as the plant is on an island and the logistics of exporting had hampered its current owner, Fiat.

Chery executives could not be reached immediately for comment. Fiat declined to comment.

Still, many other Chinese automakers have been chasing Western brands to take advantage of a global industry downturn.

Beijing Automotive Industry Holding Co, the country's fifth largest automaker, has acquired some assets of General Motors' Saab unit as part of a push to develop its own-brand cars. Geely Automobile Holdings group has also been named preferred bidder for Ford Motor's Volvo car business.

Chery, maker of one of China's best-selling compact cars QQ, had also tried to raise its profile by cooperating with foreign automakers, but refrained from doing so to avoid risks, Yin said.

Rather than acquiring and trying to revive an overseas brand, Chinese automakers can also work their own way up to the higher end, he said in March.

Also in that month, Chery unveiled its first self-developed medium-to-high end sedan, Riich G6, which Yin and other Chery executives hope can eventually compete with Volkswagen AG's famed Audi A6.

In July 2007, Chery and Chrysler LLC agreed to manufacture compact cars under the Chrysler badge for sale in the Americas, but the plan was aborted after Nissan Motor reached a similar pact with the US automaker.

It has delayed a car venture with Fiat, which later forged a manufacturing partnership with Guangzhou Automobile.