SAIC Motor, China's largest auto maker, is considering injecting its commercial vehicle assets into Shanghai Diesel Engine, which it is in the process of taking over, a source familiar with the situation said on Friday.

The proposed asset transfer, which is still in the early stages of consideration, would involve an issue of new shares by Shanghai Diesel Engine to SAIC in exchange for control of heavy-duty truck maker SAIC-Iveco Hongyan Commercial Vehicle Co and other assets, the source said.

An SAIC spokeswoman said there had been no discussions of such a plan at the company.

"We have never discussed such a plan. We will announce all major restructuring deals in a timely manner," she said.

The source said, however, that senior officials had begun considering transferring to Shanghai Diesel all of SAIC's major commercial vehicle production assets, which also include Yuejin brand trucks and Shanghai Huizhong Automotive Manufacturing Co, which makes light buses and heavy-duty trucks.

He said no timetable or detailed financial plans had been worked out, given that the acquisition of Shanghai Diesel had not yet been completed, and any asset transfer would require government approval.

"The SAIC group wants to further streamline its businesses," the source said.

"It has got approval to inject its auto part assets into Shanghai Bashi and the next step would be folding its commercial vehicle operations into Shanghai Diesel."

The SAIC group signed a letter of intent in September 2007 to buy a controlling stake in Shanghai Diesel, an engine maker, and the deal received government approval this week.