China signals that it may allow weaker automakers to merge as sales slow

Beijing

CHINESE regulators have signalled that they may refrain from introducing large-scale stimulus measures and instead encourage weaker automakers to merge or be acquired, as a slowdown in the industry exposes problematic overcapacity.

Slowing vehicle sales will "severely undermine" the auto industry's profitability and make companies with operational difficulties targets for takeovers, Qu Guochun, a deputy director at the Ministry of Industry and Information Technology, said on Saturday at a forum in Tianjin, China.