By Elzio Barreto and Fiona Lau
HONG KONG (Reuters) - Chinese carmaker BAIC Motor, part-owned by Daimler AG
Fueling BAIC Motor's ambitions, the world's biggest auto market is moving toward a second year of double-digit sales increases. A year ago, in the early planning stages, BAIC Motor's target was closer to $1 billion.
Thomson Reuters publication IFR reported on Friday the listing will come in the second quarter of 2014, citing sources familiar with the plans.
If successful, BAIC Motor's deal would be among the world's top five IPOs by value in the auto industry, according to Thomson Reuters data. Most major players have been publicly listed for decades.
The sale will provide fresh impetus for the Hong Kong financial industry's own recovery. Advisory firm PwC estimates Hong Kong IPOs could raise $32.2 billion in 2014, the highest since 2010 and nearly double the 2013 tally of $17.1 billion.
BAIC Motor's ambition also reflects confidence that Hong Kong investors will buy into companies with strong growth prospects. In the city's biggest listing so far this year, tycoon Li Ka-shing's Power Assets Holdings Ltd <0006.HK> plans to raise $3.6 billion in an electricity business IPO.
This year's expected strong showing in China's auto market will be spurred an anticipated array of economic stimulus measures, as well as robust demand for cars in smaller cities in interior regions, according to industry executives and analysts.
"China's auto industry is in the midst of a recovery, and is likely to grow 8-10 percent a year over the next few years," said Liang Yonghuo, an analyst at Haitong International Research Ltd. in Shenzhen.
BAIC Motor is the passenger car unit of ambitious state-owned Beijing Automotive Group (BAIC)
Daimler's Mercedes-Benz brand is now the smallest of the big three German luxury carmakers, after BMW
The listing could fund Beijing Automotive Group's ambition to join the ranks of SAIC Motor <600104.SS>, Dongfeng Group <0489.HK> and FAW Group as the government tries to consolidate the industry and form globally competitive companies.
The parent of BAIC Motor and Daimler didn't return requests for comments on the IPO.
Beijing Automotive Group's sales jumped 19 percent last year, exceeding two million vehicles for the first time. It has been actively expanding through acquisitions as it aims to almost double annual output capacity to four million vehicles by
The fast-growing group last year acquired two small local players, and said it was seeking to buy "a mid-to-high-end European auto brand" to accelerate global expansion.
Its passenger car unit BAIC Motor has joint ventures with both Daimler and South Korea's Hyundai Motor <005380.KS> and also sells its locally created brand, Senova. It offers a wide spectrum of vehicles, ranging from premium sedans and low-end cars to SUVs and commercial vehicles.
BAIC Motor has now added Citic Securities International <600030.SS>, Deutsche Bank
(Additional reporting by Samuel Shen in SHANGHAI and Andreas Cremer in BERLIN; Editing by Kenneth Maxwell and Miral Fahmy)