Beijing, China – Chang’an Automobile Group will become the third-largest automaker in China with the acquisition of five companies, according to a report by the Green Car Congress.

The state parent of Chang’an will take over five vehicle units of the Aviation Industry Corporation of China (AVIC) to create the country’s third-largest automaker, behind SAIC and FAW Group.

China Ordnance Equipment Group, the parent company of Chang’an, will transfer a stake in Chang’an to AVIC in exchange for that company’s ownership share of minivan company Harbin Hafei, engine maker Dongan Power, Changhe Automobile, Changhe Suzuki, and Dongan Mitsubishi. The acquisitions will give Chang’an the capacity to produce 2.2 million vehicles annually at 21 factories.

China wants to cut the number of its major auto groups from the existing 14 to ten or fewer over the next three years, through mergers and acquisitions. The state intends to form two or three auto giants with annual production capacities of at least two million units, and four to five companies with capacities exceeding one million units.

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