BAIC to Buy Smaller Truckmaker Zhenjiang Auto

Beijing Automotive Industry Holding Co. has agreed to acquire Chinese truckmaker Zhenjiang Automobile for an undisclosed price to expand its factory capacity.

State-owned Beijing Automotive, known as BAIC, says it will invest 15 billon yuan ($2.4 billion) to restructure Zhenjiang Auto and boost that company's annual capacity to 300,000 vehicles from 15,000 vehicles now.

The acquisition, which supports the country's efforts to consolidate its fragmented auto industry, also will bolster BAIC's distribution in eastern China.

Zhejiang currently builds heavy-duty trucks and specialty vehicles under the Jinggong and Shenye brands at its assembly plants in its namesake city in Jiangsu Province and the Inner Mongolian city of Hohhot. Those facilities will be used to initially make SUVs and MPVs, according to BAIC. It intends to eventually add production of engines, premium sedans and vehicles with alternative powertrains.