In order to understand the competition in the same industry, Chang’an is expected to receive the Group’s three assets

Changan Automobile announced today that major shareholder Changan Automobile Group has promised to inject the two companies into Changan Automobile after Changhe Automobile and Harbin Automobile Group have reached relevant conditions.

As the actual controller of Changan Automobile, China Southern Industrial Group Corporation and China Aviation Industry Corporation carried out the largest restructuring of the central-level auto industry at the end of last year. Among them, China National Aviation Industry Corporation will transfer the 100% equity of Jiangxi Changhe Automobile Co., Ltd. (hereinafter referred to as "Changhe Automobile") and Harbin Hafei Automobile Industry Group Co., Ltd. (hereinafter referred to as "Haiqi Group") under the gratis transfer method. 100% equity transfer into Changan Automobile's controlling shareholder China Changan Automobile Group Co., Ltd. (hereinafter referred to as "Changan Automobile Group"). Not only that, on July 9th this year, Changan Automobile Group also signed a "Joint Venture Contract" with the former cooperation method of Harbin Group to the National Peugeot Citroen Automobile Co., Ltd., and decided to establish Changan Peugeot Citroen Automobile Co., Ltd.

In response, Changan Automobile announced today that due to the aforementioned restructuring and joint venture activities, it may lead to a degree of horizontal competition or potential peer competition between the company and its controlling shareholders, and it is better to avoid and eventually resolve possible horizontal competition or potential peer competition. In order to safeguard the interests of company investors, Changan Automobile Group recently issued relevant letters and promised to inject the two companies into Changan Automobile under the circumstances that both Changhe Automotive and Harbin Automobile Group have been profitable for two consecutive years, have sustained development capability, and obviously improved management level; At the same time, it also promised that when the above joint venture project was completed and put into operation, it proposed to transfer all the equity held by the joint venture company to Changan Automobile.

It is understood that the joint venture company established by Changan Automobile Group and PSA Peugeot Citroen will be located in Shenzhen, with each party accounting for 50% of the shares, and will produce and sell light commercial vehicles and passenger vehicles in the future. The total investment is 8.4 billion yuan, and each party bears 50% of them. The joint venture company put into production the first model of the Citroen DS coupe, and the models to be produced in the future will come from the Citroen brand, its own brand, the Peugeot brand and the Changan brand. According to the plan, the first car produced by this new factory will be formally introduced to the market in 2012.