Two of China's largest auto makers signed a letter of intent to form some type of cooperation on Friday, but many questions remain about how the cooperation will manifest and when it will be completed.
Were the two companies privately owned, analysts would probably wonder if the cooperation would ever actually happen, as many hurdles must be overcome.
Both companies, Shanghai Automotive Industry Corp and Yuejin Motor Group, are state owned, however, and the central government has made it clear the deal should go ahead. If the central government is pushing the deal, it will happen, analysts agree, but that doesn't mean it won't take a lot of time and struggle.
The deal is part of the central government's efforts to develop the Yangtze River Delta and consolidate China's auto industry to make it more competitive and efficient.
The deal will align SAIC with Yuejin's major subsidy, Nanjing Auto, the two companies that bought the physical assets and intellectual property belonging to British MG Rover Corp, when that famed company found itself facing bankruptcy two years ago.
Word of the deal has shaken the Chinese auto industry not only because they could form the country's biggest auto maker - an enterprise strong enough to take on global players - but also because it would bring together two-state-owned companies that currently competing head-to-head with their self-branded models.
Yesterday, a team of experts from SAIC were dispatched to Nanjing Auto to evaluate that company's assets, according to industry insiders. The evaluation, the first major step in bringing about the deal, is expected to be complete by September 20.
"The unity should help consolidate resources for better efficiency, improve research and development capabilities, expand product mix and lift brand value for a win-win situation," SAIC said in a statement announcing the deal.