Leading State-owned Automakers May Face Regrouping and Acquisition

The Chinese Government has released guidance on regrouping of leading state-owned automakers in the country recently, serving to improve their efficiency of resource allocation and creativity.

Performance of these automakers may make the plan of regrouping seems unreasonable according to experts. However, it may be more necessary for automakers of small-and middle-size to go through acquisition and regrouping.

Moreover, these leading automakers may be required to integrate resources in companies, including centralizing subsidiaries and cutting down top managements, based on their own conditions.

There may adjustment on layout of products and businesses to increase sales and revenues. These automakers should invest more on improve technology and manufacture vehicles meeting market demands.

Structural over-productivity may it necessary to close those automakers failing to make profit. Leading automakers should have reasonable planning of production. And these leading automakers should aim at improve their creativity.