Changan Auto confirmed the reorganization plan and will collaborate with Dongfeng to build a new giant in intelligent vehicles

On April 11, 2025, Changan Chairman Zhu Huarong announced near-completion of strategic restructuring with Dongfeng, targeting a "world-leading smart-connected automotive group with proprietary core technologies."

At Dongfeng's March 28 earnings briefing, management confirmed ongoing integration discussions between parent companies and China Ordnance's automotive units.

This represents China's most significant state-owned auto restructuring entering implementation phase.

The policy makes the change

On February 9, multiple subsidiaries of China Ordnance and Dongfeng issued nearly identical notices about potential indirect shareholder restructuring, confirming merger preparations.

At the 2025 China EV100 Forum, SASAC mandated strategic auto SOE restructuring to build globally competitive smart-connected vehicle groups through resource consolidation.

Despite China's 40% NEV penetration and 60% L2 ADAS adoption in 2024, Changan and Dongfeng trail BYD/Tesla in efficiency. Their integration seeks breakthrough core technologies through concentrated resources.

SASAC introduced specialized evaluation metrics incorporating NEV tech and market share, forcing SOEs to eliminate redundant investments and homogeneous competition.

The merged entity's combined annual sales (5.16M units) would rank top 5 globally. Synergies in technology mapping and R&D integration could close gaps with industry leaders, converting fragmented investments into collaborative innovation.

From industry reshuffling to global competitive impacts

This merger may trigger industry-wide realignment: over 50 NEV brands with annual sales below 10,000 units face consolidation. State-owned and foreign automakers must accelerate restructuring or localize strategies to survive intensified competition.

Combined overseas networks (Changan's SE Asia presence + Dongfeng's European footprint) could create integrated R&D-manufacturing-sales systems to challenge Toyota and Volkswagen regionally.

Technological breakthroughs drive this restructuring: potential collaborations include solid-state batteries and AI models. Dongfeng's hydrogen tech could boost Changan's commercial EV development, while Changan's hybrid systems may enhance Dongfeng's commercial vehicles. Their 17 overseas KD plants may merge into global production networks.

Personnel reshuffles have commenced, with Zhou Zhiping (former Dongfeng executive) assuming leadership at China Ordnance Equipment Group. Zhou's cross-experience at major state automakers (FAW, Dongfeng, Changan) hints at potential T3 consolidation preparations.

Spy photos recently surfaced showing a collaborative SUV prototype labeled "Dongfeng + ? + Huawei". The vehicle has been spotted at facilities of Dongfeng, Changan and Huawei, strongly suggesting Changan as the unnamed partner.

The Changan-Dongfeng merger marks a crucial step in China's auto industry transformation from scale to strength. This integration goes beyond size, demanding technological synergy, resource optimization and strategic alignment. It addresses domestic over-competition while boosting international competitiveness through systemic reforms in organizational culture.

If the restructuring proceeds smoothly, the new group aims to accelerate development by 2030, establishing itself as a world-class automotive leader with proprietary core technologies and global competitiveness in intelligent connectivity. SASAC officials also encouraged deeper collaboration between state-owned enterprises. As Zhu Huarong stated, "This restructuring seeks greater historic opportunities" requiring management wisdom and technological commitment.