Big Chinese automakers encouraged to acquire smaller rivals

China's automakers, encouraged by Beijing, are looking to snap up smaller domestic manufacturers, Reuters reported. China has more than 100 car manufacturers who have resisted consolidation until recently, due in part to objections from regional governments who want to protect local jobs and tax revenues. But as the Chinese auto market slows sharply, the larger players have starting eyeing loss-making smaller firms, as opposed to distressed brands and assets in the US and Europe. Sichuan Auto Industry Group Co, a tiny operation, denied reports last month it was in talks to buy General Motors' Hummer brand for US$500 million. "I don't know where this is coming from," said an executive at the company. Sichuan Auto has barely US$150 million in assets. However, the executive said he had been approached by state-run domestic firms.

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