(Yicai) Sept. 19 -- Guangzhou Automobile Group has dissolved Shanghai Hino Engine, its commercial vehicle joint venture with Japan's Hino Motors, and plans to boost investment in its new energy truck business as the Chinese firm shifts focus to the fast-growing NEV market.

Shanghai Hino’s disbandment will not significantly impact GAC's operations, the Guangzhou-based company noted. The firm is also increasing its stake in GAC Hino to nearly 90 percent by raising the truck JV's registered capital to CNY2.9 billion from CNY2.2 billion (USD408.8 million from USD310.1 million), it added.

GAC held a 30 percent stake in Shanghai Hino, while Hino Motors owned the rest. Set up in 2003, the JV sold just 1,874 vehicles last year, posting a net loss of CNY61 million (USD8.6 million) on revenue of CNY234 million (USD33 million), with total assets of CNY698 million and liabilities of CNY286 million as of Dec. 31.

While GAC's passenger car sales have fallen for eight consecutive months, the commercial vehicle sector shows growth potential, according to analysts. The winding up of Shanghai Hino and higher investment in GAC Hino shows the company's commitment to the commercial vehicle market and its decision to transition toward NEVs, they added. 

GAC plans to lift investment in key areas such as NEV technologies, including batteries, motors, and electronic controls, as well as hydrogen fuel cells and self-driving tech. New energy technologies such as hydrogen fuel cells and electric motors are widely seen as essential for meeting future emission standards and keeping a competitive edge in both domestic and global markets.

GAC Hino aims to sell more than 5,000 heavy-duty trucks by next year and targets annual production and sales in excess of 200,000 units after introducing light commercial vehicles.

GAC aims to find new growth drivers and meet market demand for new energy commercial vehicles, according to the analysts.

Editor: Martin Kadiev