Two of China's major automakers, Guangzhou Automobile Group Co. (GAC) and Chery Automobile, announced on November 6 that they will form a strategic partnership and cooperate in a wide range of areas, including research and development, overseas business and production management.

GAC, which has accumulated considerable management experience through its joint venture with foreign partners, has come up short in terms of brand-building and technological innovation, whereas Chery, a successful player in the low-end market, has been weak in terms of profitability.

If successful, analysts said the new partnership might offer a breakthrough for Chinese automakers, although plenty of challenges and obstacles remain for the two due to varied regional interests.