Wuliangye investment shows keenness to try hand at the wheel
Alcohol and cars are two things least expected to go hand in hand, but a well-known Chinese liquor-maker in Sichuan province has decided to have a sip anyway by becoming a shareholder of a carmaker.
Push Group, a subsidiary of Wuliangye Group Co in Sichuan, has acquired a 0.5 percent stake in Cowin Auto, according to the carmaker's registry records.
A low-end brand of Chery Automobile, Cowin was established in 2014 and sold just 43,000 cars in 2016, according to the China Passenger Car Association.
The acquisition was part of a deal package in which Chery sold a 51 percent stake for 2.49 billion yuan ($380 million), according to a Chery statement issued last week. The absolute majority - a 50.5 percent stake - will go to a government-owned automotive investment company in the same city as Wuliangye.
Despite the move, Wuliangye said it will remain focused on its liquor-making, according to the Securities Daily newspaper.
"If we really want to do it big in the car manufacturing business, we will not hold a mere 0.5 percent," Securities Daily quoted a source in the company as saying.
Wuliangye made public its intention to make inroads into the car business as early as 2003. In 2006, it acquired a 50 percent stake in an engine-maker under Brilliance Auto Group, but sold its shares back to Brilliance in 2011.
Wuliangye is estimated to have achieved operating revenue of 80 billion yuan in 2017, with its net profit reaching 14 billion yuan in the year, Chairman Li Shuguang told reporters in December.