BUSINESS

Changan Auto Chief Optimistic on Merger With Dongfeng Motor

Published: May. 28, 2025 5:18 p.m. GMT+8

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Zhu Huarong, chairman of Changan Auto.

Chongqing Changan Automobile Co. Ltd.’s chairman sees opportunity in an expected merger with another state-owned carmaker, as China’s legacy automakers struggle to keep up with the rapid shift to electric vehicles (EVs).

A government-orchestrated merger offers a chance to grow Changan Auto’s business, Chairman Zhu Huarong said at a shareholders’ meeting Tuesday.

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Changan Auto’s chairman sees opportunity in a potential merger with another state-owned automaker, likely Dongfeng Motor, amid government encouragement for consolidation to strengthen the sector.
No official merger has been announced, but each company’s parent has formed a task force, with China South Industries Group reportedly leading, raising speculation the merged entity may be based in Chongqing.
Legacy state firms face falling sales and pressure from price cuts led by BYD, whose retail sales rose 14.9% to 965,000 vehicles in Jan–Apr 2024.

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Who’s Who

Chongqing Changan Automobile Co. Ltd.: Chongqing Changan Automobile Co. Ltd. is a major state-owned Chinese automaker. Its chairman, Zhu Huarong, views a potential government-orchestrated merger with another state-owned carmaker, likely Dongfeng Motor, as an opportunity for growth. The company has faced double-digit sales drops amid China's rapid shift to electric vehicles and increasing competition from private automakers like BYD. Any strategic restructuring would be overseen by government authorities and may not affect Changan’s existing brands or strategies.

Dongfeng Motor Group Co. Ltd.: Dongfeng Motor Group Co. Ltd. is a major state-owned Chinese automaker. It has recently been the subject of merger speculation with Changan Auto, as both companies announced their controlling shareholders are planning a restructuring with another central state-owned enterprise group. Dongfeng Motor has suffered double-digit sales drops recently, facing challenges adapting to the electric vehicle market and increased industry competition, particularly as privately owned automakers like BYD gain market share.

China South Industries Group: China South Industries Group is the parent company of Chongqing Changan Automobile Co. Ltd. It is a large state-owned enterprise in China, primarily engaged in manufacturing and defense industries. In the context of the article, China South Industries Group is leading a potential merger with Dongfeng Motor’s parent, with plans to possibly spin off its auto business to form a new, centrally controlled state-owned automaker.

BYD Co. Ltd.: BYD Co. Ltd. is currently China's No. 1 carmaker by sales, having experienced a 14.9% year-on-year increase in retail sales to 965,000 vehicles in the first four months of this year. BYD has led a price war in the auto market, recently slashing prices on 22 models by up to 34%, putting pressure on competitors and contributing to sales declines among legacy state-owned automakers.

Geely Automobile Holdings Ltd.: According to the article, Geely Automobile Holdings Ltd.'s electric vehicle (EV) brand, Galaxy, has responded to BYD's significant price cuts by rolling out similar limited-time discounts. This move is part of a broader price war in China's auto market, as carmakers compete to keep up with declining prices and shifting consumer demand for EVs.

SAIC Motor Corp. Ltd.: According to the article, SAIC Motor Corp. Ltd. is mentioned as one of the competitors responding to BYD's aggressive price cuts. Specifically, its premium marque, Roewe, has introduced limited-time discounts on its vehicles to stay competitive in the ongoing price war in China's automotive market, especially amid intensifying competition within the electric vehicle (EV) sector.

Guangzhou Automobile Group Co. Ltd.: Guangzhou Automobile Group Co. Ltd. (GAC) is mentioned in the article as one of the competitors responding to BYD’s aggressive price cuts. Its electric vehicle (EV) brand, Aion, has introduced similar limited-time discounts to keep up with the intense price war in China’s automotive market, driven by rapid adoption of EVs and heightened competition.

Zhejiang Leapmotor Technology Co. Ltd.: Zhejiang Leapmotor Technology Co. Ltd. is a Chinese electric vehicle (EV) manufacturer. In response to a BYD-led price war in the Chinese EV market, Leapmotor has rolled out limited-time discounts on its vehicles, aiming to stay competitive amid steep price cuts by leading rivals.

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