Chery and JAC to be pushed together by the Govt
The two Anhui based automotive giants, JAC, and Chery have been rumored to be planning a merger for several years, even the Chery topman has mentioned once before that he believe Chery and JAC will come together naturally.
We’re not quite sure if being pushed together by the government is considered natural or not, but a JAC and Chery merger maybe on the table in 2009. The Ministry of Industry is already talking with the two parties regarding a merger, which may lead to Anhui becoming the ‘automotive powerhouse’ of China, and perhaps even taking the coveted ‘Detroit of China’ status away from Chongqing.
It is not expected for Chery and JAC to merge straight away, as both parties need time to assess their assets and show what they will each bring to the table.
JAC is a major MPV maker, but with MPV sales stumbling they have been forced out into sedan and small car production, where they have had some success with their super mini range. Chery on the other hand, have a great deal of cars, many of which compete against each other and overlap in segments. Chery’s branding is also rather odd, with them having Riich and Rely, JAC on the other hand have only the JAC brand, which is working rather well for them.
Chery’s JV with foreign companies have reportedly stalled, including the Fiat and Chrylser JV.
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is better for chery and jac to merger, just like hyundai and kia, they may can have maintain both main brand,but
can share platform, engine,etc.
This should be a marriage without major hitches since all involved are Anhui Province folks. That contrasts with the difficulty of for example, a Dongfeng-Hafei tie-up or a BAW-Soueast tie-up which are sure to encounter obstacles posed by cultural differences.
Chery will be happy to have access to JAC’s heavy truck and bus commercial vehicles.
About those assets…Gasgoo.com tells us that JAC’s profit dropped 94% in 2008.
Good. The more mergers the better for the Chinese auto industry. There are currently just too many small automakers.
i agree with jason ! if they can learn from the partnership of hyundai and kia, why not ?
How will teh Chery line up merge into the much better looking (yet immature) JAC line up? Something has to give, and I hope it’s the Chery line up.
good idea to face the current financial crises and give business a push .partnership shows it’s success and unique solution for many great companies before .
It makes sense for JAC and Chery to merge, especially as the pair of them are so geographicall close, but what I am worried about is JAC’s small car line up, would these get squashed under Chery ownership, or would they fly together?
Chery’s line up is so vast, and overlapping, Im not sure how the two could compete. JAC has MPV’s, and Chery just launched into that segment, JAC just launched into Chery’s small market segment as well. It’s an odd match up, yet so perfect as well.