SHANGHAI Automotive Industry Corp (SAIC), China's largest automaker, recently launched a new shareholding company to pave the way for an eventual overseas listing.

　　The shareholding company, Shanghai Automotive Group Co Ltd, has registered capital of 25.7 billion yuan (US$3.1 billion) and net assets of 39.6 billion yuan (US$4.8 billion), said Zhu Xiangju, a spokeswoman for SAIC.

　　SAIC's assets in Shanghai-listed affiliate Shanghai Automotive Co Ltd, and its two joint ventures with General Motor and Volkswagen, have been transferred to the new company.

　　Cheng Hong, former president of SAIC's venture with GM in Shanghai, took the helm of the new shareholding company.

　　Analysts say the move is part of the company's effort to launch initial public offerings in Hong Kong during the first half of 2005.

　　However, Zhu decline to confirm the assumption.

　　SAIC started its ambitious expansion last October as it acquired a 48.9 per cent stake in South Korean automaker Sangyong Motors with US$500 million.

　　Currently, SAIC is in talks with British car maker MG Rover to acquire 70 per cent of its shares for 1 billion pounds (US$1.85 billion).

　　SAIC, crowned one of the world's top 500 multinationals last year, aims to increase its annual output to 4 million vehicles and become one of the world's six biggest automakers by 2020.

　　Its sales in 2004 are expected to exceed 800,000 units, up from 782,000 in 2003.

　　Other major Chinese automakers such as Dongfeng Motor Corp, Chang'an Motor Corp and Beijing Automotive Investment Corp are also seeking overseas listings.