Chinese automakers Dongfeng Motor and Chongqing Changan Automobile are in advanced discussions to merge their operations, the New York Times reported on Tuesday, citing sources familiar with the matter.
The two state-controlled companies have reportedly engaged in detailed negotiations regarding the structure of a potential merger and have informed their foreign joint venture partners of the ongoing discussions.
See also: Electric SUV Deepal S07 Marks Changan’s European Entry
The move comes as Beijing encourages its state-owned automakers to reduce reliance on foreign partners and strengthen their technological capabilities, particularly in the new energy vehicle (NEV) sector.
Market data from LSEG shows Dongfeng Motor has a market capitalization of $4.89 billion, while Changan Auto is valued at $15.65 billion. Speculation about a potential merger intensified in February when both companies announced that their parent firms, fully owned by the Chinese central government, were planning a restructuring.
See also: Changan Targets 1,500 km Range with All-Solid-State Batteries by 2027
China has been pushing its state-owned car manufacturers to enhance their competitiveness and innovation capabilities. The country’s leadership has emphasized the need for automakers to develop proprietary technologies, particularly as NEV adoption grows.