Dongfeng leads the reorganization! ? The reason is not that the sales volume of new energy by Asiautos Auto Parts(China Car Aftermarket Parts Expert) vehicles leads Changan

Edited by Asiautos Auto Part

Sources from various channels show that in the reorganization process of Dongfeng Motor and Changan Automobile, the two major automobile central enterprises, Dongfeng Motor will be the party holding the dominant power. 

The former SASAC once stated that it would conduct a new youth assessment of automobile central enterprises. Coincidentally, although Dongfeng Motor's overall sales were slightly lower than Changan Automobile in 2024, it sold more than 100,000 new energy vehicles than Changan Automobile. 

Is it really just because Dongfeng Motor's new energy vehicle sales are slightly higher than Changan? 

Things are not that simple. With a notice, Dongfeng Motor's market value soared 25.7%!

Heavy! Dongfeng Motor and Changan Automobile may be reorganized! China's largest automobile group may change hands again.

01 SASAC will separately assess new energy vehicle business

As early as March 2024, SASAC had put forward requirements to the three major central automobile enterprises, namely FAW Group, Dongfeng Group and Changan Automobile, emphasizing that their development speed in the field of new energy vehicles still needs to be accelerated, and will conduct separate assessments on the new energy vehicle business of the three central automobile enterprises.

The move is intended to promote the rapid development of these companies in the new energy sector in response to increasingly fierce market competition and technological change. 

The deputy director of the State-owned Assets Supervision and Administration Commission of the State Council also said that it is encouraged to support central enterprises to carry out high-quality investment, mergers and acquisitions and professional integration to accelerate the mastery of core industry resources and key technologies.

This means that the three major central automobile enterprises need to increase investment in the field of new energy vehicles and improve their technical level and market competitiveness.

However, although Dongfeng's sales of new energy vehicles are slightly higher than Changan, this is not the key factor in determining the dominance of this reorganization.

Next, we will explore in detail why Dongfeng was able to lead this reorganization.

02 Level differences determine dominance

First of all, we need to make it clear that there is no significant difference in level between Dongfeng Motor Group and Changan Automobile's parent company, China North Industries Group Corporation.

As a central enterprise, Dongfeng is directly under the management of the State-owned Assets Supervision and Administration Commission of the State Council, while Changan is a subsidiary of the North Industries Group Corporation.

Therefore, this reorganization is actually a merger of the parent company and the subsidiary. In this case, it is reasonable for Dongfeng to occupy a dominant position.

Recently, there are rumors that the chairman of the newly formed automobile group will be Yang Qing, the current chairman of Dongfeng Motor Group Co., Ltd., and the general manager will be Zhou Zhiping, the current general manager of Dongfeng Motor Group Co., Ltd., and the executive deputy general manager will be Wang Jun, the current president of Chongqing Changan Automobile Co., Ltd.

This is not because Dongfeng's performance in the field of new energy vehicles is better than Changan.

Although data shows that Dongfeng's new energy vehicle sales in 2024 reached 860,000 units, 130,000 more than Changan's 730,000 units, this is not the key factor in determining dominance.

If dominance is judged by sales, then FAW Group, with its strong background and resources, should occupy a dominant position in any reorganization, but this is not the case.

03 Restructuring goal: to build a central enterprise group specializing in automobile business.

Secondly, the core goal of this restructuring is to build a central enterprise group specializing in automobile business.

In this reorganization, the China North Industries Group Corporation divested its civilian automobile business and merged it into Dongfeng Motor Group, while the military industry business was separately assigned to China North Industries Group Corporation. 

In this way, the reorganized new group will be more focused on the development of the automotive field and avoid the complexity brought about by mixed military and civilian operations.

Industry analysts pointed out: "The core of this change is actually to make the business of China North Industries Group Corporation more focused, with the military being the military and the civilian being the civilian." In this way, China North Industries Group Corporation can focus on developing its core military industry, while Dongfeng can play a greater role in the automotive field. In addition, this also lays the foundation for possible further integration in the future.