Chinese car firms pair up

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MORECoach Doc Rivers a “fan” from way back of Jazz’s Jordan ClarksonThe two allies hope to create a “world-class auto company of an unprecedented scale in China,” according to a joint written statement. The communist Beijing government has been encouraging such tie-ups in the fragmented auto industry, hoping Chinese producers will pool resources to compete with bigger, richer foreign rivals. China’s domestic market is dominated by GM, Volkswagen and other foreign producers. The country has about 150 automakers, most of them small and financially weak. SAIC will pay Yuejin 2.1billion yuan ($285million) for Nanjing Auto’s auto and core components businesses and combine them with its auto-making subsidiary, SAIC Motor Corp., the companies said. Yuejin will get a 4.9percent stake in SAIC Motor, while the two companies form a new joint venture, Dong Hua Co., to operate Yuejin’s remaining components, services and trade assets. SAIC will control a 75percent stake in this venture while Yuejin will have a 25percent stake. The SAIC-Nanjing Auto deal follows an announcement in July that the two companies would cooperate in design, production and sales. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! BEIJING – Two of China’s biggest automakers announced a deal Wednesday to combine their production assets in hopes of creating a company able to compete in global markets. The tie-up between Shanghai Automotive Industry Corp. and Nanjing Automobile (Group) Corp. – both state-owned companies – adds to a flurry of recent alliances in China’s fast-growing vehicle market, the world’s second-largest. SAIC, the local partner of General Motors Corp. and Volkswagen AG, has launched its own Roewe brand. Nanjing Auto is known for reviving the MG sports car, bought from defunct British automaker MG Rover Group. SAIC will dominate the new venture while Nanjing Auto’s parent, Yuejin Motor Group, will retain a minority stake. last_img read more