Lentuo International, a Chinese non-state-owned automobile retailer has signed a strategic partnership with an association of automobile manufacturers, dealerships, and insurance brokers to set up Saneguard Automobile Insurance, an insurance provider in the People's Republic of China.
As part of the agreement, Lentuo has contributed RMB11.25m ($1.8m) of the total registered capital of RMB500m ($79.4m) for a 2.25%stake in Saneguard.
Lentuo founder and chairman Hetong Guo said the company’s participation in the venture will position it to improve vehicle sales while providing added value for its clients, laying a solid foundation for continued development as the Chinese automobile industry continues to expand.
The approval for the formation of Saneguard was issued by the China Insurance Regulatory Commission (CIRC), which is also expected to provide final approval for Saneguard to begin operations in the second half of 2012.
Saneguard will benefit from the strength of its strategic partners and aims to rapidly gain market share in the automobile insurance market.
Saneguard will be established by FAW Finance, FAW Car, Changchun FAW Fuwei Automobile Components, Tianjin FAW Xiali Automobile, FAWER Automotive Parts Limited, Jilin Yian Insurance Brokers and four automobile dealership groups, including Lentuo.