SAIC and Nanjing merger to go ahead

Following their letter of intent to discuss “comprehensive cooperation,” two of China's biggest automakers, SAIC and Nanjing Auto, have announced the start of a merger agreement expected to be finalized by October 1. SAIC will gain 100% of Nanjing Auto in exchange for a share of SAIC going to Nanjing's parent company Yueijin Auto Group, according to the AP. The consolidation of the two companies is seen as helping China in its quest to compete against industry giants in the international auto market.

The fall of the MG Rover Group in July 2005 saw both car makers looking to capitalize. Nanjing bought the rights to the MG brand name, and has since commenced production of the MG ZT and TF models for sale China. SAIC, meanwhile, bought the rights to two of the Rover models and is now selling a slightly modified version of the Rover 75 as the Roewe 750 for the Chinese market.

The merger is seen as extremely beneficial to both parties, especially since both build near-identical models that share similar technology and have many parts in common.