(Yicai Global) Feb. 22 -- Major Chinese automaker GAC Group said it will set up a CNY30 billion (USD4.35 billion) fund to boost its new energy vehicle business.

In a press release issued yesterday, GAC said the fund will be formed in partnership with a major investment fund owned by the Guangzhou government and it will focus on three main areas: automotive chips, smart and connected vehicles, and energy ecology.

The energy ecology field will mainly invest in key enterprises in GAC's energy storage and power battery production industrial chain, and the auto chip field will help with GAC's plans to build a more complete industrial ecology.

The Guangzhou Industrial Investment Fund, which is working with GAC, was established last weekend with CNY200 billion (USD29 billion) of funding. The shareholders behind the fund's controlling parties are the Guangzhou government and Guangdong province’s finance department. A dozen big local companies, including GAC and Guangzhou Pharmaceutical Holdings, also participated.

Although GAC did not specify the source of the CNY30 billion, it said that GAC Capital, the firm's investment arm, will be the fund’s manager. GAC Capital has invested in more than 10 companies so far, including HoloMatic and CanSemi Technology.

GAC sold 2.4 million vehicles last year, an increase of 12.1 percent from 2021, with revenue of CNY514.45 billion, up almost 20 percent. The firm expects its auto sales to climb by 10 percent this year. 

Editor: Tom Litting