Chinese state-owned automaker FAW group secures 1 trillion Yuan ($144 billion) credit line in a deal with 16 banks, however, it is unclear yet why the Chinese automaker needs such a huge loan.
Since it’s unclear why the Chinese manufacturer secures a huge amount of credit line but experts say it’s for obvious reasons which could be an expansion in the region.
FAW said in its social media post that the company wanted to consolidate its operations with banks, create innovative and open financial platform and secure funds for its future initiatives.
The Chinese government plans to bolster the economies of China’s northeastern provinces according to FAW source, China’s National Development and Reform Commission announced a plan in January which focuses on northeast but the announcement didn’t mention FAW at that time.
FAW shares were boosted by more than 10% after the announcement of the credit line, sixteen banks in the agreement with FAW include Bank of China, China Construction Bank, China Development Bank, and Industrial and Commercial Bank of China.
Chinese FAW group already has a joint venture with Al-haj group in Pakistan and they are producing Al-Haj FAW motors cars in Pakistan, it was also reported earlier that the automaker is focused on assembling FAW cars locally in Pakistan and they would push the car production to 15,000 units per annum by 2020.
Al-Haj FAW V2 Car is gaining momentum in Pakistan gradually and the company has received a positive feedback from the market. The group already has strong JVs with global brands including Toyota, Volkswagen, and General Motors in China. The company has collaborated with Bharat Forging Co Ltd. to produce various vehicles in India.