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SAIC looks into future

By Hao Zhou (chinadaily.com.cn)
Updated: 2008-04-09 17:33

On April 1 this year, the entire equity of Nanjing Automobile (Group) Corporation was put under Shanghai Automotive Industry Corporation (SAIC)'s name, and the integration work of both giant automakers entered a new phase.

Nanjing Auto had suspended its long-lasting cooperation with Italian automaker Fiat after SAIC signed its merger deal on December 26 last year with Yuejin Motor Group, controlling shareholder of Nanjing Auto.

However, as orders for SAIC's car models continue to outpace its production capacities, China's largest passenger car maker is considering rejuvenating Nanjing Fiat's car production line.

The 21st Century Business Herald reported earlier that Shanghai Volkswagen, Volkswagen's 50-50 joint venture with SAIC, will pay 1.5 billion yuan ($214 million) to SAIC for Nanjing Fiat assets.

"Shanghai Volkswagen is continuing preparations for assembling its current car models in Nanjing," SAIC said in a statement posted on its website.

It has also been reported that the new base for Shanghai Volkswagen will engage in production in the middle of 2008 and is expected to have production capacity of 100,000 cars by 2010.

At the same time, SAIC, a leader in the passenger car market, also has ambitious plans to produce 400,000 independently developed commercial vehicles between 2006 and 2010.

Although it has bought SsangYong's technology and started to produce the Sunwin-branded coaches under cooperation with Volvo, it was still hardly able meet this year's sales target of 700,000 commercial vehicles.

Wuxi-based Soyat, previously owned by Nanjing Automobile, could be SAIC's next merger target for expanding its commercial vehicle output. The 21st Century Business Herald said SAIC had sent an expert panel to look into the feasibility of buying out Soyat.