Two of China’s state-owned carmakers agree on future cooperation

July 30, 2007 - 0:0

BEIJING (m&c) -- Two of China’s state-owned carmakers - Shanghai Automotive Industry Corp. (SAIC) and Nanjing Automobile Corp (NAC) - were planning to amalgamate to increase their competitiveness, the China Daily reported Sunday.

According to a statement from SAIC, the two companies plan to form a working group to discuss “possibilities and programs for all-round collaboration” in vehicles, spare parts, auto trading and services. They will also talk about “an asset reorganization to achieve an all-round amalgamation,” the statement said. Consolidation between the two carmakers would help them use state assets more efficiently and to cooperate in research and development, purchasing, manufacturing and sales, the statement said. However, no precise details have yet been revealed. The move is widely seen to be the result of the fact that the two firms have been competing fiercely with their own brands using the same foreign technology, the report said. SAIC, China’s top carmaker, started selling its Roewe mid-sized sedan in March, while NAC, a much smaller concern, will launch a MG 7 sedan in the market in the second half of this year. Both models are based on the Rover 75 from collapsed British carmaker MG Rover. SAIC, the partner of General Motors and Volkswagen, in 2004 bought the intellectual properties of the Rover 75 and 25 sedans, and K-series engines from MG Rover