Following Guangzhou Automobile's merger with Hunan Changfeng Motor Co on May 21st, Chery Automobile and Anhui Jianghuai Automobile may become the next couple of companies to form a similar alliance in response to the government's call for creating competitive automobile giants, local media reported.

Starting May 21st, Chery and Jianghuai jointly started a road show in China's western areas, including Chengdu, Guiyang and Tibet, to promote brand sales in the region. But Chery spokesman Jin Yibo said the show is simply a marketing programme, which does not mean any cooperation or merger plan between the two companies has been started.

The government in eastern China's Anhui province issued guidelines early this month supporting alliances and mergers of its automakers, which include Chery and Jianghuai. Jin said despite the guideline, the two carmakers haven't made any progress in possible mergers.

Meanwhile, Jianghuai president Zuo Yan'an said in March that the company has no plan to merge with Chery Auto. "Jianghuai Auto wouldn't merge easily with other automakers but may consider deepening cooperation with rivals on the part of R&D activities," Mr. Zuo said.

Beijing has been encouraging mergers and acquisitions by large auto-making groups, aiming to create a few national champions able to compete with global giants at home and overseas. In the latest move Guangzhou Auto has signed an agreement on May 21st to take a 29 percent stake in Hunan Changfeng Motor Co, which makes Guangzhou Auto the largest shareholder of the sport utility vehicle (SUV) specialist.