Struggling carmaker Brilliance China Auto Holdings has plans to turn around mounting losses including building a production plant in Guangdong to boost sales.
'Having two production bases can help cut operation costs and increase market share. Transporting a finished minibus from the production base in northern China to the south costs 2,000 yuan,' Brilliance chairman Qi Yumin said.
'People in southern China are wealthy enough to buy a car. It would be another good starting point to develop the group's business.'
The company, based in Shenyang, Liaoning province, last week posted a net loss of 649.6 million yuan for last year, compared with a profit of 48.56 million yuan in 2004.
The loss included a 300 million yuan impairment loss on the intangible assets of its Zhonghua sedan operation whose sales declined 18 per cent last year to 9,000 units. Minibus sales fell 2.6 per cent to 60,000 units while BMW sales through a joint venture soared 101 per cent to 17,501 units.
Adding pressure on the company's finances is a US$200 million bond that is due for refinancing.
