As big international car makers such as General Motors and Ford are selling off some of their brands to get through the financial crisis, Chinese automakers are taking advantage of the situation by buying up their assets.

MADE IN CHINA: Two Swedish engineers check China-made Volvos as they roll off an assembly line in Chongqing

Chery Automobile Co. Ltd., headquartered in Wuhu, Anhui Province, is the latest domestic carmaker to acquire a foreign brand through its plan to purchase Volvo from Ford Motor Co. Yin Tongyue, Chairman and General Manager of Chery, acknowledged the planned acquisition at a group interview with the media on February 12.

Chery will receive a certain amount of financial support from the China Development Bank and the Export-Import Bank of China "to acquire world-known auto brands that are in difficulty," a Chery company official told Beijing Review.

Besides Chery, other auto makers, including Geely Holding Group of Hangzhou, Chana Inc. of Chongqing and some companies in other industries are considering acquiring international brands. Last November, the Ministry of Industry and Information Technology encouraged strong domestic companies to make overseas acquisitions. Industry insiders call this "bottom fishing," or paying a small price to take advantage of an opportunity to participate in global competition by acquiring an international brand and its global channels.

Stirring up debate

Many Chinese businesses are keen to give bottom fishing a try. They believe that the market values of many overseas companies are lower now and that they have a better shot at going global. They also believe that international companies have fewer bargaining chips and that integrating foreign operations in their own will be relatively easier now than before the financial crisis hit.

Some Chinese companies believe they must make overseas acquisitions to obtain good-quality assets and advanced foreign technologies, broaden their pool of investments and talented employees, and enhance their innovative capacities. More importantly, foreign acquisitions will allow them to increase their status in international industrial chains, expand their international business and enhance their global competitiveness.

"If we get their brands, intellectual property rights and local sales channels, it will be helpful for our Chinese companies to enter the international market," said Yin, explaining the reasons for Chery's decision to purchase the Volvo brand.