** Shenzhen-listed Chongqing Changan Automobile 000625.SZ slips 1.3% to 12.87 yuan, set for the biggest one-day decline since March 21, and on track to snap three straight sessions of gain

** Hong Kong-listed Dongfeng Motor 0489.HK fall 2.4% to HK$4.50, on course for the second session of decline

** Dongfeng Motor and Chongqing Changan are in advance discussions to combine their operations, the New York Times reported on Tuesday, citing people with knowledge of the matter

** The two Chinese automakers, both controlled by the central government, have conducted detailed discussions on how to merge their operations and informed their foreign partners of the merger discussions, the report said

** China will carry out a "strategic" reorganisation of automakers owned by the central government and encourage them to improve competitiveness and market share, a senior official at the state assets regulator said on Saturday

** YTD, Dongfeng Motor shares up 21.5%, while Chongqing Changan stock down 3%

(Reporting by Donny Kwok)

((donny.kwok@thomsonreuters.com))