Chery reveals merger with JAC

Before their possible merger, Chery Automobile Co and Jianghuai Automobile Co (JAC) might have their cooperation in the engine business, a person familiar with this issue told the Shanghai Securities News.

Previously, Chery never said a word officially about the merger with JAC.

The source told the Shanghai Securities News that administration staff at JAC had a tour of the Chery Engine Company in June, and said Chery had to raise its capacity of producing engines.

To cooperate with JAC, Chery has resumed preparations for an A-share initial public offering.

Chery's spokesman Jin Yibo said the merger of the two companies would have complementary advantages. "Chery is good at developing sedans and engines, and JAC has other advantages of making other products which Chery can't compete with."

Agencies and Shi Jierui contributed to this story