Beijing Automotive Group is planning an IPO in the second half of the year that could raise as much as 20 billion yuan (over USD3bn).

Beijing Automotive is planning the IPO for investment funds as part of a strategy to expand its annual sales to 3.6m vehicles by 2015.

The company has reportedly hired Goldman Sachs and Morgan Stanley for the Hong Kong IPO according to Bloomberg.

Analysts say that a shakeout in China's auto industry is likely over the next ten years, with some smaller OEMs likely to disappear or be absorbed into larger groups who will have greater competitive strengths.