China: Changan promoted to state-owned enterprise
While largely a formal step, the implications are significant: Changan – or more precisely, China Changan Automobile Group Co – has this week been officially established as a state-owned enterprise with registered capital of 20 billion yuan (approx. £2.1 billion). The announcement has been confirmed by Chinese media outlets, including Auto Home and state broadcaster CCTV. The new entity is supervised by the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, bringing Changan into the category of centrally administered State-Owned Enterprises (SOEs).
Until now, Changan was a subsidiary of the China South Industries Group, itself state-owned. As of Tuesday, Changan has been formally separated and will now operate independently under the direct control of the central government.
Further details regarding Changan’s strategic direction have yet to be disclosed. To date, the company and its affiliated brands have only published promotional content marking the establishment of the new entity, under the slogan “New Mission, New Journey”. A press conference is scheduled for 30 July, which may provide additional clarity. Earlier this year, rumours circulated regarding a possible merger with Dongfeng, following simultaneous restructuring announcements by both firms, though no confirmation has followed.
Zhu Huarong, previously CEO of Changan Automobile, has been registered as the legal representative of the newly established entity and is expected to continue in a leading role. According to the registration, the company will focus on the sale of automobiles and New Energy Vehicles (NEVs), as well as the development of automotive components.
With its elevation to centrally managed SOE status, the Changan Group – including its brands Avatr, Deepal, Qiyuan, Changan Auto, and Changan Kaicheng – now operates at the same administrative level as China’s leading OEMs. This move could provide Changan with greater access to financing, but it also brings stronger alignment with central government directives. For example, reports indicated that Beijing has prohibited state-owned enterprises from investing in EU countries that support tariffs on Chinese-made electric vehicles. Privately held EV makers such as BYD, Nio, and Xpeng are not subject to such restrictions. Changan, however, cancelled a planned product launch in Milan in October 2024, later rescheduling the event for March in Mainz, Germany. Italy backed the tariffs, while Germany did not.
The political influence on Changan’s corporate decisions is therefore set to intensify. This is expected to impact the company’s current site selection process for a planned vehicle factory in Europe. A European executive confirmed that planning is underway, though no specific locations have yet been named.
Changan plans to enter the European market with three brands: Changan, Deepal, and Avatr. Initial target markets include Norway, Denmark, Germany, the UK, and the Netherlands. The launch will begin with the Deepal S07, expected to be priced at around €45,000, followed by the smaller Deepal S05.
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