Dongfeng Motor Group (HKG:0489, SHA:600006) and Chongqing Changan Automobile (SHE:000625) are in advanced merger talks, New York Times reported Tuesday, citing people privy to the matter.
The merger will create an entity capable of producing about 5 million vehicles per year that will rival Ford, General Motors and Stellantis, according to the report.
Global consulting firm AlixPartners said factories need to operate at 60% to 80% of capacity to make a profit. In comparison, Dongfeng Motor Group and Chongqing Changan Automobile operate at 48% and 47% capacity, respectively, New York Times wrote.
The deal aims to slash excess gas-car capacity and boost electric vehicle dominance but risks affecting partnerships with Ford, Nissan, and Honda, according to the report.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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