Nanjing Automobile (Group) Corporation has asked the National People's Congress (NPC) to support its car business, fueling rumors the company is in difficulty.
Company president Wang Haoliang has submitted a proposal to the NPC, seeking government support for a loan of two billion to three billion yuan (about 260 million to 390 million U.S. dollars), says Friday'sShanghaiSecurities News.
The partner of Italian carmaker Fiat said in January that it would build cars under the acquired British brand MG from March 27.
The company plans to build an annual production capacity of 200,000 MG vehicles, 250,000 engines and 100,000 gearboxes in Nanjing with a total investment of 3.5 billion yuan in the next five years.
The ambitious plan, however, was supported only by the Import and Export Bank of China, which has offered a loan of 500 million yuan (about 65 million U.S. dollars).
"Banks apparently lost confidence in the company because several of its subsidiaries are in the red," the newspaper quoted an industry insider as saying.
Wang's proposal apparently confirmed reports that the company had financing problems, said the insider.
The president revealed that the company has established a preparatory team for the car business and would welcome investment.
The NPC press office could not be contacted for comment on the submission on Friday.
Nanjing Auto acquired Britain's MG Rover in 2005 for 97 million U.S. dollars, outbidding Shanghai-listed SAIC, the biggest Chinese carmaker.
