Chery and JAC officially merging to become Da-An Motors
Chery and JAC are to officially merge and become Da-An Motors according to media reports from early this morning. The two car companies are both owned and operated by Anhui provincial government and are set to merge later this year to become Da-An Motors according to a plan shown to the Shanghai Securities, which was then passed onto the press.
The merger is likely to happen by the end of the year, and will make for quite a force in the Chinese automotive market. Chery was set up by the Wuhu local government to provide jobs in the area, and JAC was set up under similar circumstances. JAC set up a JV with Hyundai to build MPV’s for the Chinese market, which has served them well so far. During 2008, JAC’s sales fell due to a weakened demand in the MPV sector, but the introduction of a small car range has given JAC the boost it needs to continue growing. Chery have become very good at making small hatchback cars, and plan on moving into the premium and compact segment with the launch of several new cars later this year. The two companies product line up does overlap, especially as Chery are planning to get into the JAC stronghold of MPV production.
Da-An Motors will give Anhui the production base it needs to garner the much competed title of ‘The Chinese Detroit’ with a large sea port quite close by, as well as being surrounded by suppliers, it could be that Anhui takes the crown from Chongqing.
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is good news actually. with combined of chery and jac, i think the new company will be able to pass the million car mark in very short time,this will help them to bring down the cost, become a global car maker.
“….with a large sea port quite close by…”
Aren’t these carmakers located on the Yangzi River, hundreds of miles from a sea port? Seems that export logistics could pose a challenge.
As for suppliers, they couldn’t be any more centrally located within China, a real plus.
Wuhu is close by the banks of the Yangtze river, not ideal, but close enough to major ports for export. Also neighbouring provinces have masses of third party suppliers, and also Anhui too.
JAC/Chery will be a massive powerhouse soon.
The curious is that both are starting business operation in Brazil. Chery’s already started, reserving sales, they’re gonna launch Tiggo a few weeks after Kia Soul.