The Toll Group plans to acquire a 40% share of one of the largest third-party logistics service providers in China’s automotive market, Tianjin Anda Logistics.
“The Chinese automotive market is the largest in the world and offers immense opportunities for Toll to leverage our industry leading automotive capabilities,” said Toll Group Managing Director, Paul Little AO.
“The market grew 32% in 2010 to record sales of 18.6 million vehicles compared to 11.8 million in the US. In the future, motor vehicle sales will be supported by strong economic growth, the current low rate of car ownership (50 cars per 1000 people in China versus over 750 in USA1) and government investment in road infrastructure.
“Importantly for Toll Group, manufacturers in China are increasingly demanding a more efficient and effective supply chain. Our joint venture with Tianjin Anda allows us to partner with a leading local company to provide those services in a proven and cost effective manner.
“Tianjin Anda provides finished vehicle transport, storage and processing services for leading brands such as FAW, Toyota, BMW, Peugeot-Citroen and Chery. It is based in the city of Tianjin, a major manufacturing centre and China’s largest import terminal, which is close to Beijing and well connected to the main national highways,” said Mr Little.
Last year, Tianjin Anda generated revenue of over RMB 400 million (AUD58m). Toll will initially acquire 40% of the privately owned business with the option of moving to a majority stake over the next two years and to increase that further over five years.
Toll’s acquisition remains subject to Chinese regulatory approvals which are expected to take three to six months.