Nanjing wont acquire more than 10% of SAIC
The ever on going saga of who is buying who, will they wont they, is fit for any Asian soap opera drama, but it seems that the merger, to make a Chinese motoring giant is set to go underway. Nanjing Autos and SAIC are ready to sign on the dotted line, and make a Chinese brand big enough to take on the worlds top brands.
Under the agreement, SAIC will acquire all of Nanjing Autos, (possibly including sub brands such as Nanjing IVECO and Nanjing MG), SAIC will gain access to Nanjings OEM and component manufacturing facilities, in return Nanjing claims that it will be able to claim 10 to 15% of SAICs shares, SAIC says that Nanjing is reaching further than it can and afford to, offering Nanjing between 5 and 8% of SAIC stock.
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Stretching for only 10 to 15 percent is very telling about the overall financial strength of Nanjing Auto.
In the best case scenario, in 5 or 10 years Nanjing will be to SAIC what Saturn is to General Motors.
A small appendage.
By all accounts, the Nanjing Fiat JV is on its very last legs and should be pretty much DOA by mid 2008.
Nanjing doesnt have much else, besides Nanjing MG (which has yet to show a profit) and IVECO (which shows a profit) as does the light truck range. The rest is baggage.