SAIC, MG Rover Close to Deal
Shanghai Automotive Corporation (SAIC), China's largest
auto maker and MG Rover are close to a one billion pound
investment deal which would save the British carmaker.
Discussions between the two companies have been underway
for several
months. Under terms of the proposed deal, SAIC will
own 70 per cent and MG Rover 30 per cent of the venture,
which will develop and produce cars in China and England.
It is expected that the deal will be completed sometime
in 2005.
SAIC has been the Chinese partner for both General
Motors and Volkswagen
in China, and has benefited from its early start in China's
growing automobile market. Even though auto sales have
slowed
in the past few months because of credit-tightening
policies, auto manufacturers have continued to expand
capacity.
Since SAIC is a top-tier maker in China, it has decided
to expand into the main markets of Europe. Other second-
and third-tier makers have decided to expand into developing
markets by manufacturing and selling in Africa
and South and Central America.
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