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.
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