The Chinese government this month is expected to issue new policy guidelines to encourage Chinese auto makers to take over domestic rivals before seeking regulatory approval for capacity expansion, the Shanghai Securities News reported.
The newspaper citied unnamed sources as saying that the government will reward auto makers that arrange merger deals with tax credits and other incentives.
China last year said it would promote mergers and acquisitions among more than 100 domestic auto makers to create a few national auto giants able to compete with global players at home and abroad.
Official figures show that the combined sales of the country's top 10 car makers stood at 11.9 million units last year, accounting for 87% of the total.
China has overtaken the U.S. as the world's largest auto market thanks to a series of stimulus policies to boost the country's auto sector. The policies included tax cuts for purchasers of small cars and subsidies for buyers in rural areas.
