The Voyah Free electric car by Dongfeng Motor is seen at the 2021 Auto Shanghai. — Reuters
HONG KONG: Chinese state-owned automakers Dongfeng Motor and Changan Auto have announced that their parent companies are planning significant restructurings, fuelling speculation of a potential merger between the two firms.
Dongfeng Motor stated that its parent, Dongfeng Motor Corporation, will initiate a revamp that may alter the controlling shareholder structure, while assuring that the actual controller remains unchanged.
Changan Auto issued a similarly worded statement regarding a restructuring plan by its parent, prompting discussions on Chinese social media about a possible combination of the two companies.
The move comes as part of a broader government push for state-owned automakers to reduce reliance on foreign joint venture partners by enhancing domestic technology, innovation and competitiveness, particularly in the new energy vehicle sector.
Chinese authorities have been urging these companies to improve their capabilities amid growing pressure from domestic rivals such as BYD, which has steadily increased its market share by rolling out competitive electric vehicles.
Foreign brands, notably Japanese automakers, have struggled in the world’s largest auto market as Chinese companies advance their own EV technologies.
Dongfeng Motor, which partners with Nissan and Honda in joint ventures, and Changan Auto, both play key roles in China’s automotive industry.
Along with other central government-owned enterprises like FAW, the restructuring plans signal a new strategic direction aimed at consolidating and strengthening China’s domestic automotive sector.
Market observers are closely monitoring the developments, anticipating that the revamp may reshape the competitive landscape in the rapidly evolving new energy vehicle market.
