FAW-Dongfeng-Changan Merger Encouraged by Chinese Government
- The Chinese government is encouraging partnership or even a merger between FAW, Dongfeng and Changan. Negotiations have already taken place between the three manufacturers.
- In 2017, FAW, Dongfeng and Changan manufactured a total of 9 million vehicles, which would put this group (if it was created) at the top spot in China ahead of SAIC (6.6 million) and especially among the very first manufacturers worldwide, alongside the Volkswagen, Renault-Nissan and Toyota groups.
- FAW, Dongfeng and Changan produce mostly foreign licensed cars, as FAW manufactures Audi, Volkswagen and Toyota, Dongfeng manufactures Nissan, Infiniti, Honda, Kia, Citroen, Peugeot and Renault, Changan manufactures Ford, Mazda, DS and Suzuki, so in all 7 million vehicles out of the total 9 million in 2017.
- Indeed FAW, Dongfeng and Changan also have their own brands, which account for the other 2 million vehicles in 2017. Changan alone accounts for half of this volume, or 1 million units.
- The aim of a partnership between the three Chinese manufacturers would be notably to set up common platforms, common electric motors, common logistics and joint R & D policy, in short to share the costs to obtain very significant economies of scale.
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