Caixin
Jan 04, 2018 07:36 PM
BUSINESS & TECH

Quick Take: Liquor-Maker Takes Sip of Low-End Car Brand

Photo: Visual China
Photo: Visual China

Alcohol and cars don’t mix, but that hasn’t stopped a well-known Chinese liquor-maker from taking a second shot at getting into auto manufacturing.

A subsidiary of liquor-maker Wuliangye Yibin Co. Ltd. has recently bought a 0.5% stake in Cowin Auto, according to the carmaker’s company registry records. Cowin is a low-end domestic brand of state-owned Chery Automobile Co. Ltd.

The stake purchase was part of a larger deal that changed Cowin’s largest shareholder from Chery to a government-owned auto investment company based in the same city as Wuliangye — Yibin, Sichuan province. The investment company now holds 50% of Cowin.

The deal is Wuliangye’s second attempt at the automaking industry. In 2006, it acquired a 50% stake in an engine-maker under Brilliance Auto Group, but sold its shares back to Brilliance in 2011.

The liquor-maker already has assets in the sales end of the auto industry. It has invested in a dozen car dealerships in Sichuan, according to data provided by Beijing-based consultancy Auto DS.

China is the world’s largest auto market, accounting for around 30% of global passenger vehicle sales in 2016, according to the European Automobile Manufacturers Association.

Contact reporter Coco Feng (renkefeng@caixin.com)

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