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China's Gasgoo.com in talks on stake sale to IDG

(Agencies)
Updated: 2008-07-31 16:34

Gasgoo.com, a Chinese business-to-business e-commerce startup specializing in auto parts sourcing, is in initial talks with IDG Ventures and several other potential investors to sell as much as a 20 percent stake, its president Kevin Chen said on Tuesday.

Other firms that have expressed an interest in the firm include the investment arms of Japan's Softbank Corp and Lenovo Group Ltd, the world's No 4 PC maker.

He expected the deal to be completed next year, but did not indicate how much the company hoped to raise from the stake sale.

Gasgoo.com, 60 percent controlled by Chery Automobile, China's fourth-largest carmaker, started to offer auto parts sourcing services in early 2007, linking global industry giants to hundreds of Chinese parts suppliers.

Chen expected his firm to be profitable this year, with sales quadrupling to 20 million yuan ($2.93 million).

Sales will continue to grow at a similar pace next year, and at least double annually in the following few years, he added.

Chen, formerly a procurement executive at Chery, said he was not too worried about the US auto market's current woes as they might spur the auto giants to procure more parts in emerging markets as they move to slash costs.

"China only supplies about 3 percent of global auto parts sourcing needs currently. The ratio will be significant higher in the coming years," he said.