Changan, Dongfeng Spark Market Interest with State-Owned Restructuring Plans

Chongqing - On February 9, Changan Auto and Dongfeng Automobile Co., Ltd. (DFAC) announced that their parent companies, China South Industries Group Corporation (CSGC) and Dongfeng Motor Corp, are planning restructuring efforts with other state-owned enterprises.

Dongfeng Motor Corp and CSGC have yet to confirm a partnership in the restructuring, the news has still drawn major market attention to the state-owned automaker's integration. The stock market responded quickly.

Two Voyah models by Dongfeng Motor Corp are displayed at the 18th Beijing International Automotive Exhibition. (Photo/Dongfeng Motor Corp)

According to Guancha.cn, by the close of trading on February 10, the day following the release of the announcements by DFAC and Changan Auto, Dongfeng Motor Corp shares surged by 25.7% in Hong Kong, while Changan Auto’s stock rose by 4.37% in the A-share market. Other listed companies under Dongfeng Motor Corp and CSGC also saw varying degrees of increase.

Dongfeng Motor Corp announced that its vehicle sales reached 2.48 million units in 2024, showing a 2.5% year-over-year growth, according to the State-owned Assets Supervision and Administration Commission of the State Council.

In contrast, Changan Automobile reported total sales of 2.68 million vehicles, reflecting a 5.1% increase from the previous year. Notably, Changan's sales of new energy vehicles (NEVs) exceeded 734,000 units, marking a significant 52.8% growth compared to last year.

According to China Daily, Zhang Xiang, an auto industry researcher at the North China University of Technology in Beijing, noted that the restructuring would effectively enhance the competitiveness of Chinese vehicle brands globally, based on their production capacity.

Beyond the production data, both companies are accelerating the development of intelligent new energy vehicles. On February 9, Changan Auto launched its intelligent strategy, the Dubhe Plan 2.0, to accelerate intelligence.

Its Deepal brand signed a comprehensive business cooperation agreement with Huawei, the Chinese tech giant, to advance intelligent driving technology. Deepal rolled out intelligent driving versions for all its models, integrating the upgraded DeepSeek system into the vehicle's operating system.

Similarly, Dongfeng Motor Corp extended its partnership with Huawei in January to co-develop new EV models under its eπ brand. As a key component supplier, Huawei provides intelligent driving, intelligent cockpit systems, and integrated solutions for the eπ brand. On February 7, Dongfeng Motor Corp announced that its self-owned brand, Voyah, is gradually integrating with the DeepSeek large model.

Workers performed welding operations at Changan Auto's factory in Liangjiang New Area. (Photo/Wang Jiaxi)

Although this restructuring announcement was unexpected, Caixin reports that news of state-owned automaker restructuring has circulated in China, with recent collaborations on new business ventures.

For instance, in 2019, FAW Group, Dongfeng Motor Corp, and Changan Auto signed a joint venture agreement with Alibaba and other companies to establish the T3 Mobility platform. In 2020, the three automakers and Nanjing Jiangning District jointly invested in establishing China Automotive Innovation Corporation (CAIC) to focus on smart chassis and hydrogen fuel technologies.

Furthermore, this restructuring aligns with China's strategy for reorganizing state-owned enterprises. According to the State Council Information Office, on January 17, Lin Qingmiao, head of the Bureau of Enterprise Reform of State-owned Assets Supervision and Administration Commission of the State Council (SASAC), said at a press conference that the government’s primary focus for this year would be on the restructuring and integration of central SOEs, aiming to optimize the structural adjustment of the state-owned economy.