Chinese state-owned automakers Dongfeng Motor and Chongqing Changan Automobile Company are reportedly in advanced discussions about merging their operations, as per a report by The New York Times. This potential merger, which involves detailed plans for combining the companies, has been communicated to their foreign partners.
Dongfeng is currently valued at $4.89 billion, while Changan Automobile holds a value of $15.65 billion, according to data from the London Stock Exchange Group (LSEG). This move towards a merger follows initial talks in February when the two companies were said to be considering joining forces to create a stronger entity.
The decision to merge aligns with China’s strategy to promote self-reliance among state-owned automakers, particularly in the realm of new energy vehicles. Changan Automobile, which encompasses brands such as Chang-An, Deepal, and Avatr, as well as joint ventures like ChangAn Ford and ChangAn Mazda, recently announced its ambitious goal of selling three million vehicles this year, with a target of reaching five million units annually by 2030.
In a bid to expand globally, Changan Automobile held a European launch event where it revealed plans to enter at least ten regional markets in Europe by the end of the year. Additionally, the company announced a partnership with Kim Long Motor to establish a new vehicle manufacturing plant in Hue, Vietnam. This facility is set to produce Kim Long Changan Vietnam five to seven-seater passenger vehicles.
Vice-president of Changan Automobile Group, Wang Hui, stated, “This collaboration with Kim Long Motor Hue marks a crucial step in Changan Automobile’s globalization strategy and will serve as an important starting point for Changan Automobile’s entry into the Vietnamese market.”
Overall, the potential merger between Dongfeng Motor and Chongqing Changan Automobile Company reflects a strategic move within the Chinese automotive industry to consolidate and strengthen state-owned entities in the face of evolving market dynamics.
