Automaker FAW Group of Changchun in Jilin province is said to be in merger talks with Liaoning's Brilliance China Automotive Holdings Limited, which could lead to FAW acquiring the smaller Brilliance and its three listed subsidiaries.

The acquisition, if it goes through, will catapult FAW to be China's largest automobile producer, overtaking the Shanghai Automotive Industry Corporation. FAW's output in 2008 totaled 1.5 million units. The company said earlier that it has set a sales target of 3 million units for 2012.

Tian Hongfu, deputy director with the company's planning department, said that the situation is still unclear and declined to comment further.