Against the backdrop of central state-owned enterprise (SOE) restructuring, the proposed merger between China’s two state-owned automotive giants, Dongfeng Motor Group and Changan Automobile, has been terminated after 116 days of negotiations. The plan was initially announced on February 9.
On June 5, multiple China Ordnance Equipment Group (CSGC)-affiliated listed companies – including Changan Automobile, Costar Group, Hunan TYEN, and Harbin Dongan Auto Power – announced that their controlling shareholder, CSGC, has received State Council approval to spin off its automotive business. The separated unit will become a new first-tier central SOE directly supervised by the State-owned Assets Supervision and Administration Commission (SASAC).
Post-spinoff, listed companies such as Changan Automobile, Hunan TYEN, and Harbin Dongan Auto Power will have the newly established auto SOE as their indirect controlling shareholder. Although the shareholding chain will change, their ultimate controller remains SASAC.
Concurrently, Dongfeng Motor Group issued a statement clarifying it is not currently involved in any related asset or business restructuring, emphasizing that its production and operations “remain normal.” This confirms the suspension of the previously discussed Changan-Dongfeng integration plan.
Following the news, CSGC-affiliated stocks opened higher. By midday, Changan Automobile rose over 4%, while Hunan Tianyan surged more than 6%.
The spin-off establishes Changan Automobile as a standalone central SOE automaker, positioning it alongside FAW Group and Dongfeng Motor Group to form China’s “Big Three Central State-Owned Automakers.” This restructuring grants Changan greater autonomy in resource allocation and industrial synergy.
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