SAIC Motor Co. Ltd. (SAIC, 600104.SH), the first domestic automaker to launch its own high-end brand, is planning to debut in mid and low-end markets to compete head on with rivals Chery Automobile Co. Ltd., Geely Automobile Holdings Ltd. (0175.HK) and BYD Auto Co. Ltd.

"We are planning to enter the mid and low-end auto markets, are seeing the fastest growth via SGMW," said President Chen Hong of SAIC and SAIC-GM-Wuling Automobile (SGMW), a three-party joint venture established in 2002.

"SAIC will gradually sharpen its competitiveness by tapping into key auto spare parts markets in the years to come," added the automaker's Chief Finance Officer Gu Feng.

In its 2009 annual report, SAIC said it would spend no more than RMB 5 billion on mergers and acquisitions (M&As) this year, allocating RMB 3 billion for passenger cars and RMB 2 billion for commercial cars.

"The next step in the auto market is obviously M&As and integrations both at home and abroad, which is why SAIC plans to continue seeking M&A opportunities in 2010," said Gu.

"But we will lay our focus on core and key auto spare markets, including those for new energy automobiles in an effort to boost our competitiveness."

Since the beginning of this year, raw material prices, in particular steel prices, have been on the rise, but Gu said SAIC would be able to withstand the fluctuations.

SGMW started the expansion of its two auto production bases in 2009, with the Liuzhou base expected to produce 800,000 units by the second half of 2012.

The auto maker, one of China's biggest, posted 2009 annual auto sales volume of 2.72 million units, up 57% year-on-year, with net profit growing ninefold to RMB 6.5 billion.