China's second-largest vehicle maker, Shanghai Automotive Industry Corp. (SAIC), plans to list shares in its entire business, possibly overseas as it gears up to become a global brand.

Many of China's largest companies list only a portion of their business, with oil giant Sinopec Corp., top steelmaker Baoshan Iron and Steel Co. and hydropower titan Yangtze Electric Power Co. representing their respective parents on bourses.

But several Chinese companies are considering listing their entire group, following a lead set in January by mobile phone and television giant TCL Group.

Shanghai Auto, a Chinese partner of General Motors and Volkswagen AG's Shanghai ventures, would either invite strategic investors or use its listed vehicle in Shanghai -- Shanghai Automotive Co. -- for its new listing, the Shanghai Securities News said. The listing would take place over the next few years.

"Shanghai Auto plans to complete asset restructuring within two years and aims to list as a group," the newspaper quoted the company's president, Hu Maoyuan, as telling a shareholders' meeting of its listed vehicle Monday.

"One of the choices will be a direct listing on overseas markets," Hu was quoted as saying.

"The world's major automakers are all already listed and so this is the right way to go for the firm," said analyst Xu Xiang at China Southern Securities. "Plus the government has been encouraging large State-owned firms to list in their entirety."

China, the world's fastest-growing major auto market, saw car sales leap 75 percent last year to a record 1.97 million units, though growth is expected to slow to 20 to 30 percent this year.

The newspaper quoted Hu as saying that Shanghai Auto's sales hit 186.2 billion yuan (US$22.5 billion) last year. Vehicle sales were expected to exceed one million for the first time this year from just over 800,000 units last year.

"Shanghai Auto is more likely to choose to list overseas," said Xu. "It's such a huge company that the domestic bourses would find an offering too hard to digest."

Shanghai Auto has been casting a covetous glance at overseas acquisition targets.

It is already a part owner of South Korea's Daewoo Motors, which it bought into in 2002 along with General Motors and Japan's Suzuki Corp.

Shanghai Auto has also been keen to purchase South Korea's debt-laden Ssangyong Motor Co.

"Time is of the essence for Shanghai Auto, because if they wait too long to list they'll never be able to compete with the world's major auto companies," said analyst Gu Qing at Haitong Securities. "Expanding overseas is something they have to do."

Shanghai Auto has been aggressively expanding in China with General Motors, putting it in a better position to compete with the country's top automaker, First Automotive Works, as well as Dongfeng.

Foreign firms such as Volkswagen, General Motors and Honda Motor have invested billions of dollars in China, chasing increasingly affluent consumers who have benefited from the country's booming economy.

Source: Shenzhen Daily