SAIC, Dongfeng said to buy GM, Chrysler assets

Shanghai, November 18 (Gasgoo.com) Under the sway of the global financial crisis, the U.S. auto giants General Motors and Chrysler LLC are tottering on the brink of collapse. Japan's Toyota Motor was previously rumored to buy them out, but now Chinese carmakers SAIC and Dongfeng are also said to have plans to acquire the two U.S. auto companies, reported the 21st Century Business Herald today.

On November 15, a senior official of China's Ministry of Industry and Information Technology -- the state regulator of China's auto industry -- told reporters that the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.

An industry analyst noted that the global financial crisis has forced Chinese manufacturers to retool and upgrade themselves in order to meet and survive the challenge. Many enterprises dependent on low-value-added manufacturing will be driven out of the new wave of competition by technically innovative and financially sound rivals. It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.

In the global acquiring process, Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global carmakers such as GM and Chrysler, said an expert from Deloitte & Touche accounting firm. 

In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng's possible acquisition of troubled GM or Chrysler.