UPDATE 1-China's Zhongxing in talks with GM, FAW -sources

By Fang Yan

SHANGHAI, July 24 (Reuters) - Chinese pickup truck maker Hebei Zhongxing Automobile Co is in talks with General Motors GM.N and major Chinese automaker FAW Group to explore opportunities for cooperation, including possible equity ties, a source close to the situation said on Thursday.

"Consolidation is inevitable in the Chinese auto market, which now has more than 100 players, and a company of Zhongxing's size makes a good takeover target or joint venture partner," the source told Reuters.

"Zhongxing is holding talks with several potential partners including FAW and GM to seek cooperative opportunities, including possible equity ties, but nothing has been decided at the moment," one of the sources said.

A Zhongxing spokesman could not immediately be reached for comment and an FAW executive declined to comment.

GM's China spokesman Henry Wong also had no direct comment on the matter.

"We are a big auto company so we are always out there looking for opportunities and in discussions with everybody around the world. I don't actually have information on discussions in China," Wong said.

Zhongxing, a second-tier player in China's auto industry but a major maker of pickups and sport-utility vehicles, expects to sell about 45,000 vehicles this year, including 15,100 overseas. It sold about 36,000 units last year, with exports at roughly 10,000 units.

The source gave no specifics about Zhongxing's discussions with GM, which runs two ventures with China's top automaker SAIC Motor (600104.SS) making cars and minivans.