For years, FAW, the China partner of Volkwagen and General Motors, has been seeking an equity deal with Brilliance Auto, based in the northeastern province of Liaoning.

When asked chances of Brilliance becoming an acquisition target of FAW, Liaoning governor Wang Min said: "We have already worked out a development plan to have 3 million vehicle manufacturing capacity in Liaoning by 2015. There will be no such deal any more."

Beijing has been pushing for major consolidation of its highly-fragmented auto market now crowded with more than 100 players.

But many local governments are not strongly motivated as auto has been a pillar industry that offers both jobs and fiscal income for the locality.