Chinese carmaker Dongfeng Motor and China South Industries Group, the parent firm of auto giant Changan Automobile, are planning to restructure with other state-owned enterprises.

Dongfeng Automobile, Dongfeng Electronic Technology, and other of Dongfeng's listed units announced possible changes to their indirect controlling shareholders yesterday. Changan Auto, Dongan Auto Engine, Great Wall Military Industry, Xiyi Industrial, and other firms under CSGC unveiled similar plans on the same day.

The companies under CSGC said they had received a notice from the owner about ongoing restructuring plans with other SOEs. The restructuring might lead to changes in controlling shareholders but not in the actual controller, they noted, adding that the move still needs approval from relevant authorities.

Shares of Dongfeng Auto [SHA: 600006] and Dongfeng Electronic [SHA: 600081] surged by their 10 percent daily limit to CNY8.03 and CNY11.89 (USD1.10 and USD1.63), respectively, as of lunch break in Shanghai today. Changan Auto [SHE: 000625] jumped 5.5 percent to CNY14.29 a share in Shenzhen, while Dongan Auto Engine [SHA: 600178] and Great Wall Military [SHA: 601606] soared by 10 percent to CNY12.89 and CNY12.69.

Although Dongfeng and CSGC have not explicitly named each other as restructuring partners, there have been long-standing rumors in the auto industry about a strategic restructuring between Dongfeng and Changan Auto at a group level. The firms have not yet replied to Yicai's request for comment on the matter.

Established in 1969, Dongfeng has sold around 60 million vehicles, with its assets reaching CNY521 billion (USD69.2 billion) and a headcount of 121,000 employees as of 2023. It owns high-end electric vehicle brand Voyah and has joint ventures with Honda Motor, Nissan Motor, and Stellantis.

CSGC was set up in 1999 and holds over 50 firms and research and development organizations, including Changan Auto, Tianwei Group, Jialing, and Jianshe. It has over 30 production bases and marketing networks worldwide and has ties with Ford Motor, Suzuki Motor, Mazda Motor, Yamaha Motor, and Fuji, with an annual revenue exceeding CNY200 billion.

There are 98 SOEs under the State-owned Assets Supervision and Administration Commission in China.