Clifford Chance

Clifford Chance advises Shanghai Auto on joint venture to produce MG cars in Thailand with Charoen Pokphand

Shanghai/Bangkok: Leading international law firm Clifford Chance has advised China's largest automaker SAIC Motor Corporation (formerly Shanghai Automotive Industry Corporation) to establish a joint venture with Thailand's largest conglomerate Charoen Pokphand Group (CP) to produce MG automobiles in Thailand for the domestic and international markets.

The new entity SAIC Motor – CP Co., Ltd has around THB 2,500 million of capital. SAIC will own a 51% stake in the joint venture, while CP will hold 49%.The Thailand joint venture plans to launch products successively from the beginning of 2014 and as a first step gradually form a production and marketing scale of 50,000 automobiles per year. As a second step, the joint venture will introduce more products and export them to ASEAN and other right-hand-drive countries by taking advantage of preferential tax policies within the ASEAN region, and strive to achieve a planned production capacity of 200,000 automobiles.

Corporate partner Andrew Matthews commented, "It has been tremendously satisfying to assist SAIC in the establishment of its first joint venture with a foreign partner to produce its own brand passenger vehicles outside China. SAIC is China's largest car manufacturer producing nearly five million vehicles a year, although to date almost all production has been sold in China. The MG brand is part of motoring history and now it is owned by SAIC, this joint venture is an important step for SAIC to raise its brand awareness and presence in South East Asia."

Corporate partners Andrew Matthews in Bangkok and Kelly Gregory in Shanghai led on the transaction and were supported by counsel Angela Nobthai,  senior associate Sahachai Wibuloutai and associate Sirimas Rianrungrueng in Bangkok.