We finally have something to talk about from the Chinese Auto World other than the regular stories of copycat models propping every now and then. This is the pure outcome of the government efforts in guiding the companies to join hands in an effort to reduce the avid number of competitors in the Chinese markets.
SAIC, a state owned top Chinese automaker merged with the Nanjing Auto in a deal stipulated to be worth $1.9 billion. The merger didn’t happen overnight as it took quite a while considering the fact that talks between the two automakers was on since a few months.
Nanjing is the same company which took over the manufacturing rights of the British backer MG. The new venture would see both companies sharing some component and service aspects under the new dubbing Dong Hua but this would be after the deal gets the official sanction of the Chinese government.
The automotive assets of Nanjing would now be taken over by SAIC but Yuejin Motor, the company from which Nanjing has been taken over, would retain 25% of the ownership rights. These are the first two companies to respond to the governments call, hope that the others follow soon to see the Chinese Auto Industry grow on more realistic grounds.
[Courtesy: Edmunds]
