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Analysts Expect CN Auto Industry Nears Consolidation Tipping Point as SOE Carmakers Such as BAIC MOTOR May Have Merger
2026-09-25 14:48:05 The cooperation between GAC GROUP (02238.HK) and FAW Group has sparked the possibility of broader consolidation in China's auto market, as this represents a rare move by the Chinese government directly targeting state-owned assets, Nikkei Asia, citing sources, reported. Feng Xiao, Co-Head of China Industrials Research at CLSA, said the cooperation marks a very important beginning, indicating that the local governments behind state-owned enterprises have finally reached their limit in bearing annual losses or cash burn. He forecast a number of state-owned automakers, including Dongfeng Group, BAIC MOTOR (01958.HK), SAIC Motor and JIANGHUAI AUTO (600418.SH), to advance potential mergers, either among state-owned enterprises or with private enterprises. According to estimates by BofA Global Research, China's current total automobile production capacity stands at 40 million vehicles per year, way more than domestic demand of below 20 million vehicles and export volume of 10 million vehicles. Feng expected Chinese automakers need to sell at least 400,000-500,000 vehicles annually to break even. Based on theoretical calculations, only eight to nine automobile companies may ultimately survive. ~ AASTOCKS Financial News Website: www.aastocks.com | |