China automakers seek merge
SAIC and Nanjing to share best of MG Rover's parts binA merger between China's state-owned SAIC and Nanjing auto manufacturers has come closer after a letter of intent was signed late last week.
China's top automaker Shanghai Automotive Industry Corp (SAIC) said in a statement Friday that the two companies will discuss "possibilities and programs for collaboration" in manufacture, parts, sales and services, and "an asset re-organization to achieve an all-round amalgamation".
Once bidding rivals, the partnership between SAIC and Nanjing Automobile is expected to ease pressures both companies have confronted trying to make a return on the MG Rover assets they took over mid-2000.
The Nanjing Automobile Corp (NAC) won the expiring UK car company's fixed assets including the Longbridge plant production lines, while SAIC secured design blueprints for the Rover 25 and 75, and intellectual property rights for Rover engines.
SAIC produced the Roewe 750, a slightly stretched version of the Rover 75, last year and NAC-MG claimed the launch of the first Chinese-made sports car in the re-born MG-TF earlier this year.
Chairman of NAC UK, Wang Hong Biao said the cooperative with SAIC was a major boost to prospects for the Longbridge plant, which has resumed only limited production of MG cars.
According to China Daily, the central government has endorsed the merger and wants further tie-ups to help consolidate China's fragmented auto industry, which has more than 100 manufacturers. SAIC is in partnership with Volkswagen and GM, and NAC has a deal with Fiat.
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