JAC and Chery Merger Plans to be shown at end of year

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Although it has been mentioned in the news and on CCT previously, Chery and JAC do have plans to merger although both have said it will be a long process which will see the appearance of Da An Motors. A plan of action is set to be released at the end of the year which will be submitted to regional and national governments for approval and eventual creation of one of the largest car companies in Eastern China.

A JAC executive was interviewed by the Daily Economic News (每日经济新闻) and was quoted as saying that both car companies have been thinking of merging together since 2002 but due to company history, and cultural differences nothing became of the plans at such an early stage. As the plan has come back to the front of the stage again, the Anhui provincial government (the owner of both companies) is pushing for them to join together but a plan of action has not yet been drafted.

Chery recently sold 20% of its stock to Chinese investment companies, which netted the company over 2 billion RMB in cash which it intends to spend on merging with JAC and R&D. Chery hopes that a JAC merger will give it a greater advantage in the Chinese marketplace.

One thing is for sure, Chery are probably smarting that they didnt go after any foreign assets in 2009 and have since lost out to their regional arch enemies, Geely, in the quest to become the No. 1 Chinese upstart automaker.