Dongfeng jumps on bets consolidation will sweep China car market.

By Jerry  Published On February 10, 2025

Dongfeng Motor Group Co. surged almost 90% in Hong Kong after the Chinese automaker said its parent company plans to restructure, a move investors speculated could kick start a wave of consolidation in the nation’s ultra-competitive car market.

Dongfeng Motor Corp. is planning a restructuring with other central state-owned enterprise groups that may lead to a change in its controlling shareholder, Dongfeng Motor Group said in an exchange filing Sunday.

Separately, another legacy automaker in China, Chongqing Changan Automobile Co. said Sunday that its indirect shareholder, China South Industries Group Co., is aiming to restructure with central state-owned enterprise groups too.

Shares jumped on Monday. Dongfeng climbed as much as 86%, the biggest intraday advance on record, before paring gains to 19%. Changan rose 6.1%.

Like their counterparts in Europe and the U.S., China’s legacy automakers are struggling to regain ground lost to the electric vehicle boom. The seismic shift in the market has given rise to new industry heavyweights like BYD Co., now China’s top-selling car brand, while squeezing out companies that can’t keep up with the technology-heavy offerings popular with drivers.

Source: FORTUNE

 


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