Shanghai Automotive Industry Corp. to acquire Nanjing’s Carmaking Business

Shanghai Automotive Industry Corp. to acquire Nanjing’s Carmaking Business

Shanghai Automotive Industry Corp. is the dominating automaker in the Chinese market and they are now acquiring Nanjing Automobile Group Corp.’s auto-assembly and component-making businesses.

They would be paying around 2.1 billion Yuan for this deal. Both the companies are owned by the state.

After the deal is complete, Nanjing Auto will own 320 million shares of SAIC Motor.

This deal is a result of the pressure applied by the Chinese government to consolidate the domestic auto manufacturing to compete effectively with growing competition from international companies like Toyota and Volkswagen.

J. Scot Sharland, chief executive officer of Automotive Industry Action Group spoke on the changing auto industry in China: “The Chinese auto industry is pretty much like the U.S. market when we first started — there were 40, 50, 60 companies, and now there are basically three. You will see the same kind of consolidation here.”