SAIC acquires Nanjing Auto and its Fiat venture

Shanghai, April 9 (Gasgoo.com) With the assets transfer registered with the industrial and commercial authorities, the acquiring of Nanjing Auto by larger rival Shanghai Automotive Industry Corp. (SAIC) was completed on April 8, just three months after the two companies signed a merger agreement to create the largest automaker in China.

After buying out 100% of the holdings of Nanjing Auto in early April, SAIC announced plans to invest $1.2 billion to integrate and further develop the smaller company, a partner of Italian carmaker Fiat. The investment by SAIC includes the consolidation of product development, engineering and manufacturing operations.

SAIC has a plan to boost the annual production capacity of its Nanjing facilities (or Nanjing Auto) to 500,000 units by 2012. The Shanghai auto-making giant will help Nanjing further develop the MG range of sporty vehicles, especially for export markets, while some of the companies' shared resources will be earmarked for further development of the domestic Roewe product series.

The merger remains a work underway. Later this year, Nanjing will launch a revised MG7 sedan, equipped with SAIC's 1.8-liter four-cylinder engine. It will also start production of the MG3, a smaller hatchback to compete with compact crossover vehicles, and the mid-size MG5 sedan in 2009.

Nanjing Auto terminated its venture with Fiat in December, when SAIC, a partner of Volkswagen, agreed to buy all of Nanjing Auto's auto-making assets, including its Fiat venture that has an annual capacity of 60,000 vehicles.

SAIC aims to build nearly 2.0 million vehicles in 2008, including joint-venture models developed with partners Volkswagen and General Motors.