Dongfeng Motor Group, Dongfeng Honda, and Changan Motors, alongside different companies under Dongfeng Motor Corporation and China South Industries Group (CSGC), reported that they are discussing restructuring plans with other state-owned enterprises (SOEs).
Despite these discussions, the organizations explained that corporate ownership would remain unchanged, with China’s State-owned Assets Supervision and Administration Commission (SASAC) keeping up with ultimate control.
China’s state-owned auto giants Dongfeng Motor HKG: 0489 and Changan Automobile SHE: 000625 have declared plans to reorganize, indicating they could merge to become one of the world’s biggest auto groups.
The two car companies announced almost continuously last night that their respective indirect controlling shareholders are planning reorganizations with other state-owned central conglomerates.
The rearrangements might prompt changes in their indirect controlling shareholders but won’t prompt changes in actual controllers, the two organizations’ announcements read.
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Wuhan-based Dongfeng Motor has joint ventures with PSA Peugeot Citroen, Nissan, and Honda. Dongfeng Motor Corp. (DMC), its parent organization, was once called the Second Automobile Works of China.
Meanwhile, Chongqing-based Changan Automobile is constrained by Beijing’s China South Industries Group (CSIG). It keeps up with partnerships with Portage and Mazda. Both CSIG and DMC are governed by the State Council’s state-claimed assets regulator.
China has been the world’s biggest vehicle market since 2009 with an annual manufacturing capacity of 40 million vehicles, but it sells only about 23 million domestically. It also drives the worldwide EV market, as its EV and plug-in hybrid (PHEV) car sales represent 60% of worldwide sales.
Since July, EV penetration in China has exceeded 50%, but intense price competition has squeezed profit margins since 2024. Only firms like BYD, Li Auto, and Huawei-backed Aito have reportedly managed to turn a profit.
In 2024, Chinese carmakers reduced costs on a record 227 models, up from 148 in 2023.