The restructuring of Dongfeng and Changan Automobile Groups announced in February this year has taken new shape and has been suspended as previously reported by the media.
On June 5, Chongqing Changan Automobile Co., Ltd. (stock code: 000625, stock abbreviation: Changan Automobile) issued an announcement stating that after the separation of China North Industries Group Corporation, its automobile business was separated into an independent central enterprise, and the State-owned Assets Supervision and Administration Commission of the State Council will perform the duties of the investor.
On the same day, Dongfeng Motor Corporation (stock code: 600006, stock abbreviation: Dongfeng Motor) also issued an announcement revealing that the company had received a notice from its indirect controlling shareholder Dongfeng Company that Dongfeng Company would not be involved in the relevant asset and business restructuring for the time being.
This news means that Changan Automobile's indirect controlling shareholder will be "upgraded" from a second-level company under the former central enterprise (China North Industries Group Corporation) to the 99th independent central enterprise, achieving the same level as China FAW Group Corporation and Dongfeng Motor Corporation.
On February 9, Dongfeng Group, Dongfeng Technology and other "Dongfeng Group" listed companies and Changan Automobile, Dong'an Power and other "Ordnance Group" listed companies simultaneously issued announcements, saying that their indirect controlling shareholders were planning to reorganize with other state-owned central enterprises. The news of the reorganization and integration of Changan and Dongfeng Automobile Groups thus fermented.
However, in the nearly four months after the announcement, the industry has had many doubts about the restructuring and integration of Changan and Dongfeng. The main controversy is that Changan belongs to the China North Industries Group Corporation, while Dongfeng is a central enterprise directly under the State-owned Assets Supervision and Administration Commission of the State Council. The two are not equal in administrative level. Who will lead whom after the integration?
In the first quarter of this year, Changan Automobile sold 705,200 vehicles, up 1.89% year-on-year, while Dongfeng Group sold 388,000 vehicles, down 25.7% year-on-year. The sales volume of the two companies has further widened.
Amidst various confusing news, on May 7, Changan Automobile issued a statement denying its merger with Dongfeng Motor, saying that it had discovered a number of self-media accounts that had organized the spread of false information, claiming that "Changan Automobile has been merged into Dongfeng Group as a second-tier enterprise," slandering Chinese auto brands and maliciously defaming the relationship between Changan Automobile and other auto brands.
On May 19, "Xuanyuan Business Review" published the news that "Dongfeng and Changan will no longer merge and reorganize", which mentioned that Chongqing Changan Automobile's separation from China North Industries Group Corporation and becoming the 99th central enterprise under the supervision of the State-owned Assets Supervision and Administration Commission is the best and most rational solution.
This report analyzes that in 2024, Changan Automobile's sales volume will be 2.68 million vehicles and Dongfeng's sales volume will be 2.48 million vehicles. Although their operating conditions are different, one is a second-level company under a central enterprise (China North Industries Group Corporation) and the other is a central enterprise. Each has its own advantages and disadvantages. Not to mention who will merge with whom, even if the "small headquarters + business collaboration" model is adopted, there will still be huge resistance and severe challenges in organizational structure, personnel placement and corporate culture. It will be difficult for the merged company to carry out its business smoothly.
Now, with Changan Automobile's indirect controlling shareholder separated into an independent central enterprise, new progress has been made in the reform of automobile central enterprises. Dongfeng Motor's announcement that "it does not involve the restructuring of related assets and businesses for the time being" also means that the restructuring of the two has been put on hold, but a new round of adjustments is already on the way.
