By Moses Akaigwe
Two of China’s biggest state-owned automakers are in advanced discussions to merge, in a deal that would create a formidable manufacturer of cars and military vehicles but could also create problems for their American and Japanese partners, reports The New York Times.
Dongfeng Motor and Changan Automobile have conducted detailed talks on how to combine their operations and told their foreign partners of their intentions, said two people with detailed knowledge of the discussions who were not authorized to comment.
Esch company produces slightly more cars for its own brands and through joint ventures than global automakers like Mercedes-Benz or BMW.
Dongfeng and Changan together make about five million cars a year — more than Ford Motor and almost as many as General Motors or Stellantis, the giant that owns Fiat, Chrysler and Peugeot.
A merger of Dongfeng and Changan would represent a significant consolidation of China’s auto market, the world’s largest, and another sign of the country’s rapid embrace of electric vehicles.
Both companies have considerably more factory capacity for producing gasoline-powered cars than they need.
Beijing’s hope is that a combined company will be able to close excess factories for gasoline cars and become more successful in electric cars.
China’s national government owns controlling stakes in Dongfeng and Changan. Dongfeng is a leading supplier of military vehicles to the People’s Liberation Army, and Changan is a subsidiary of a Chinese military contractor, which could draw unwanted attention from the Trump administration to a new, larger military supplier and its joint venture partners.
Chongqing-based Changan has been Ford’s principal partner in the Chinese auto market for more than 20 years. Dongfeng, based in Wuhan, is the longstanding main China partner for Nissan Motor and one of two main partners in China for Honda Motor.
Changan and Dongfeng mainly produce petrol-powered cars for their joint ventures. A merger that leads to a greater emphasis on electric cars for their own brands could affect their international partners.
Ford and Nissan declined to comment, and Honda did not immediately respond to a request for comment.
Both Changan and Dongfeng in Nigeria, with the former (Changan) represented by a popular motor Company, Mikano Motors, which has been riding high with the brand’s vehicles like Eadi, CS35, CS 55, the UNI Series, CS 95, X7, and many more.
In December 2024, Changan’s CS55 was voted Nigeria’s Car of the Year by the Nigeria Auto Journalists Association (NAJA).