Shanghai Automotive Industry Corp (SAIC), China's biggest vehicle manufacturer, is mulling a two-year plan to list the entire group.

It would use proceeds to fund an ambitious expansion to be an international automotive giant with its own brands, company officials said Tuesday.

SAIC president Hu Maoyuan revealed the market plan on Monday at a shareholder's meeting of Shanghai Automotive Co Ltd, SAIC's listing vehicle in the Shanghai stock market.

"The company has had such an idea for a time, however, the specific plan is still under discussion by the top management," Xue Hao, a SAIC spokesman, said Tuesday.

The local partner of General Motors and Volkswagen is considering various ways to raise capital, including selling shares in Hong Kong and other overseas markets, but the final plan will need approval from authorities, according to Hu's speech.

"To list the entire group will have a great meaning to the company as well as to the automotive industry in China," said Gu Qing, a Haitong Securities analyst. "Collecting capital to getting bigger and stronger is a trend for automotive companies in China. First Automobile Works and Dongfeng may also list their entire groups in the future."

She pointed out that developing auto brands will require huge sums, the listed Shanghai Automotive, can't fulfill the job for its parent. The firm said yesterday its first-quarter profit more than doubled to 710.7 million yuan (US$85.63 million).

"But the group listing will be less attractive if the plan eventually is fulfilled without the two joint ventures, Shanghai Volkswagen and Shanghai General Motors," she said.

SAIC poured more than 2 billion yuan for research and development in the last year, less than 3 percent of its sales.

SAIC overtook First Automobile Works in terms of all-vehicle sales as China's biggest in the first quarter of this year.

It posted a 29 percent year-on-year rise in sales in the first quarter by selling more than 230,000 sedans, multiple-purpose vehicles and vans. China sold more than 1.27 million vehicles in the three months, a 28.98 percent year-on-year rise.

(eastday.com April 21, 2004)