SAIC and Nanjing Auto alliance to set trend

The recent tie-up between Shanghai Automotive Industry Corp (SAIC) and the parent of Nanjing Automobile Group would set a trend for industry consolidations, Fitch Ratings said.

The two carmakers earlier announced they formed a joint working group to explore possibilities of strategic co-operation. No further details have been confirmed.

SAIC chairman Hu Maoyuan said in April the company was interested in working with Nanjing Automobile to reduce competition in the eastern coast of the country.

Fitch Ratings auto analyst Matthew Kong said this was a move in the 'right direction', suggesting a passenger-car joint venture as an option for the initial stage.