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SAIC and Yuejin Group have signed a major cooperation agreement. Following the merger, the combined annual output of SAIC and Nanjing Automobile (NAC) is expected to exceed 2 million units.
The highly anticipated "Shangnan Cooperation" has finally been finalized. On December 26, Shanghai Automotive Group (SAIC) and Yuejin Auto Group, the main shareholder of Nanjing Automobile Group, officially signed a comprehensive cooperation agreement at the Great Hall of the People. As a result, the entire vehicle business of Nanjing Automobile will be fully integrated into SAIC. This collaboration is set to create a powerful automotive entity in the Yangtze River Delta with an annual production capacity of over 2 million vehicles, reshaping the industrial structure of China's auto sector.
Under the agreement, all vehicle-related assets of Nanjing Automobile, including Nanjing Iveco and NAC’s MG division, will be incorporated into SAIC. The vehicle and component assets will be transferred to Shanghai Automotive, a listed company under SAIC, while other parts and service trade assets will go into Donghua, a joint venture between SAIC and Yuejin. SAIC will invest 2.095 billion yuan to acquire Yuejin’s automobile and parts assets, and Yuejin will hold 320 million shares in Shanghai Automotive and 25% in Donghua.
Due to the signing of the agreement, Shanghai Automotive was suspended for one day on the A-share market.
At a press conference before the signing, Hu Maoyuan, Chairman of SAIC, emphasized that the full integration of SAIC and Nanjing Auto aims to meet the demands of international competition in the domestic market. With foreign brands dominating the industry, Chinese automakers must innovate and collaborate to gain a stronger foothold. He outlined the principle of cooperation as “comprehensive integration,†aiming for five unifications: unified planning, R&D, procurement, production, and marketing. This approach is expected to generate significant synergy effects across both vehicle and parts businesses, as well as domestic and international operations.
Despite the merger, Nanjing Auto will retain its legal identity, name, and tax channels. Although it is not a full acquisition, the deal is seen as beneficial for both parties. SAIC gains valuable assets such as Nanjing Iveco and the MG brand, along with substantial production capabilities, including 200,000 vehicles, 250,000 engines, and 100,000 gearboxes. These resources are expected to significantly boost SAIC’s own brand, Roewe. In the future, Roewe may use MG’s powertrains, enhancing its competitiveness.
In 2018, SAIC produced 1.34 million units, and by November this year, the figure had already reached 1.5 million. With Nanjing Auto’s annual capacity of 200,000 units, the merged entity is expected to surpass 2 million units by 2009, making it the first Chinese automaker to reach this milestone. It would also position SAIC as a global competitor alongside Hyundai and Nissan-Renault.
Regarding the coexistence of Roewe and MG, SAIC President Chen Hong confirmed that both brands will continue to operate independently but with differentiated strategies for shared growth.
Financial updates:
Nanjing Auto Fiat will split its original network to continue serving existing owners. According to the agreement, 50% of Nanjing Fiat’s shares held by Nanjing Auto will be transferred to SAIC. Both sides have reached a consensus on the equity transfer, with Fiat withdrawing its stake. However, they remain committed to supporting the 160,000 existing Fiat customers through the existing network. Additionally, their long-standing cooperation in commercial vehicles and parts will continue. It is reported that the Nanjing Fiat plant will serve as a production base post-merger.
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