Changan and Dongfeng could join forces to dethrone BYD and claim the title of China’s leading EV maker
China’s auto industry is vast, fast-moving, and often difficult to track without a flowchart and a magnifying glass. Even major Western automakers like Toyota and Volkswagen—well-established in the region—operate multiple joint ventures that churn out overlapping models.
With hundreds of brands—many state-owned—competing in an increasingly saturated market, the Chinese government is now advocating for consolidation. The goal: streamline operations, eliminate redundancy, and accelerate the country’s transition to electric vehicles (EVs).
Speaking at a recent event in Beijing, the vice chairman of China’s State-owned Assets Supervision and Administration Commission (SASAC) called for automakers to restructure and realign their operations. The idea is that by sharing development and manufacturing resources, state-backed companies can improve efficiency and better compete with more agile private-sector rivals.
Back in February, South China Morning Post reported that the government was considering placing Dongfeng and Changan under a single holding group. If this merger goes through, the resulting entity could surpass BYD and emerge as China’s largest EV manufacturer—a major shift in the market landscape.
“The restructuring, if it materializes, would be a significant step toward industry consolidation and carry long-term importance for China’s auto sector,” a Morgan Stanley analyst noted.
Consolidation Gaining Momentum
In 2023, Changan sold 2.68 million vehicles, while Dongfeng moved 2.48 million. But both have fallen behind BYD in the EV segment and missed their electric sales targets last year.
Ivan Li, a fund manager at Loyal Wealth Management, remarked, “The two companies’ announcements suggest a potential merger of their state-owned parent groups, though no official confirmation has been given.” He added that the government likely sees consolidation as a way to reduce internal competition and better position the industry for long-term growth.
Joint Ventures Remain Crucial
Despite lagging EV sales, both Dongfeng and Changan remain deeply embedded in China’s broader auto industry through major joint ventures. Dongfeng collaborates with Nissan, Honda, Peugeot, and Citroën, while Changan partners with Ford and Mazda. While these alliances could complicate a merger, they also underscore the strategic importance of both companies on the global stage.
