Chery Automobile Co, China's largest indigenous car maker, has resumed preparations for an A-share initial public offering as the country's securities regulator lifted its nearly 10-month ban on domestic IPOs due to a recovery in the country's stock market.

Chery had applied for a domestic listing in June 2008 but the application was shelved amid a market slump as the global financial crisis struck home, the newspaper said, citing Chery's spokesman Jin Yibo.

Chery has resumed its preparations to go public and is conducting due diligence, Jin was quoted as saying.

Jin did not provide Chery's financial details but said the automaker was qualified for a public listing helped largely by a firming auto market.

No timetable or details about the size of the IPO were given.

Chery executives could not be immediately reached for comment.

China lifted its ban on domestic IPOs last month due to a strong rebound in the stock market amid signs of economic recovery.

Meanwhile, Jin also confirmed that Chery and Anhui Jianghuai Automobile Co (600418.SS), a van maker also based in the eastern province of Anhui, had started working to consolidate their assets under the guidance of the local government.

China has been urging a major restructuring of its fragmented auto sector. The government aims to cut the number of major auto groups to 10 or fewer from 14, and wants two or three mega-producers eventually.

Jin did not give a timetable for the merger but said the two companies might start their cooperation on the engine business. (Reporting by Fang Yan and Jacqueline Wong)