Seventy percent of SAIC's assets in Shanghai-listed affiliate Shanghai Automotive Co Ltd, which includes holdings in two ventures with General Motors (GM) and Volkswagen, have been transferred to the new company.
The transaction will involve all of SAIC's 2.29 billion non-tradable shares in Shanghai Automotive Co, according to earlier media reports.
Chen Hong, a former president of the GM venture in Shanghai, would take the helm of the new holding company.
Zhu declined to comment on reports that the new company plans to launch initial public offerings in Hong Kong and New York during the first half of 2005 to raise up to six billion dollars in capital.
However, SAIC has ambitious expansion plans. In October, it bought a 48.9 percent stake in South Korean automaker Ssangyong Motors for 500 million dollars.
It is in ongoing talks with MG Rover to acquire 70 percent of the trouble British carmaker for up to one billion pounds sterling (1.85 billion dollars).
SAIC hopes to increase its annual output to four million vehicles as part of ambitious plans to become one of the world's six biggest automakers by 2020.
Sales in 2004 are expected to exceed 800,000 vehicles, up from 782,000 units in 2003.