Beijing has reportedly chosen four big domestic carmakers to lead a series of mergers that will reduce the number of companies in the industry to 10 from 14.
The Shanghai Securities News yesterday reported that Shanghai's SAIC Motor Corp, First Auto Work Group in Jilin, Hubei-based Dongfeng Motor and Chongqing-based Changan Automobile have been chosen to launch the national consolidation and are expected to reach 2 million vehicles in yearly sales.
In addition, the government has selected four smaller companies to conduct mergers at the regional level. These include Beijing Automotive Industry, Guangzhou Automotive Industry Corp, the parent of Denway Motors, Anhui-based Chery Automobile and China National Heavy Duty Truck, the parent of Sinotruk (Hong Kong).
Shares of SAIC, the country's largest carmaker, rose 0.79 per cent to close at 8.90 yuan (HK$10.09) yesterday. FAW Xiali, First Auto's small-car subsidiary, gained 1.83 per cent to 5.56 yuan, while FAW Car rose 3.02 per cent to 10.92 yuan.
Trading in Changan Automobile was suspended yesterday after its shares jumped 10 per cent.
Dongfeng, the third-largest carmaker, closed 4.2 per cent higher at HK$2.98.