Brilliance losses at 9 billion RMB in the first half of the year

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Brilliance Auto Holdings are set to split up their MPV and car producing activities to slow down losses, according to their announcement to the Hong Kong stock exchange yesterday.

Brilliance Auto Holdings, which is a holding corporation for the Jinbei MPV/Van and the Brilliance car making operations is set to sell its 51% stake in Brilliance automobile back to Brilliance Automobile for 494 million RMB

According to sina.com, Brilliance Auto’s has been running at a loss for several years, once it has been broken away from the mother company, Brilliance Auto Holdings, then the mother company’s financial situation will improve and will provide a better portfolio for potential investors.

The reason for Brilliance Auto’s losses over the past few years are likely to be due to heavy investment in R&D which has seen the Brilliance range of cars expand rapidly from a one car line up consisting of the BS6 to BS4, Coupe, FRV hatch and sedan. Thanks to the expanding line up, sales of Brilliance cars have expanded by 28% oveWith new models launched, sales of its Zhonghua-branded cars expanded 28% in the first nine months of the year, whilst Jinbei MPV/vans grew 21% in sales over the same period.

Brilliance currently has a joint venture with BMW, which sees the BMW 3 and 5 series being produced in China in cooperation with Brilliance. This cooperation is likely to be expanded in the next few years to incorporate other models from the BMW line up.