Shanghai Automotive and Nanjing Automobile Forge Partnership

Shanghai Automotive Industries Corp. and Nanjing Automobile Corp. have agreed to a "comprehensive cooperation" on design, production and sales.

The two companies hope to pull together to create an automaker that can compete with global car makers.

China is the world's second largest and fastest-growing auto market. Beijing is also encouraging such tie-ups in hopes to turn out a better product than the very fragmented car industry that China might.

Passenger car sales rose 37% last year.

Total vehicle sales, including trucks, were up 25.1% last year.

Nanjing Automobile Corp and SAIC are both

government owned. 

Nanjing Auto is China's oldest and is the local partner of Italy's Fiat SpA. The company bought and relaunched the MG sports car.

SAIC is a local partner of GM and VW, (two initials are the limit) but has also created its own Roewe brand based on the Rover 25 and 75.

Chery Automobile is China's biggest with 8.3% market share. VW has 17% and GM has 9.7%.

If the two companies can share assets, ideas, staff, and resources…perhaps there will be a new major player before long.

What do you think?