Baoxin Auto Group Ltd, the smallest mainland car dealer listed in Hong Kong, agreed to buy NCGA Holdings for $305 million to bolster its network of showrooms in northern China.

Baoxin will pay $232 million in cash, issue $58 million in bonds to NCGA's owners and offer $14.6 million in new shares, the Shanghai-based company said in a statement to the Hong Kong Stock Exchange on Thursday.

The purchase will help Baoxin increase its number of dealerships by 36 percent and add Porsche and Volvo to its collection of luxury vehicle brands. The deal underscores the mounting pressure for Chinese auto dealers to consolidate as China's slowing economy undermines demand for automobiles.

China Daily-Agencies