Recent news indicates that the previously rumored merger and reorganization between the state-owned enterprise Dongfeng Motor Corporation and Changan Automobile Group under China Ordnance Equipment Group may not come to fruition. The latest development reveals that the China Ordnance Equipment Group will be split, elevating Changan Automobile to an independent central enterprise, on par with Dongfeng Motor Corporation and FAW Group. Over the past two years, senior officials of the China Ordnance Equipment Group have frequently encountered troubles amidst the ongoing purges within the Chinese Communist Party’s military-industrial complex.
According to reports from mainland Chinese media, Changan Automobile announced on June 5th that it had received notification from its indirect controlling shareholder, the China Ordnance Equipment Group, that the latter’s automotive business will be split into a separate central enterprise approved by the State Council of the CCP, with responsibilities carried out by the State-owned Assets Supervision and Administration Commission. Following this division, the indirect controlling shareholder of Changan Automobile has changed to the newly established central enterprise in the automotive sector, with no change in actual control.
On the same day, Dongfeng Motor Corporation announced that they had been notified by their indirect controlling shareholder, Dongfeng Company, that there are no current plans for asset and business reorganization.
Prior to this, the only automotive enterprises directly overseen by the State-owned Assets Supervision and Administration Commission of the State Council were FAW and Dongfeng. With the split of the Ordnance Equipment Group, Changan Automobile is now on equal footing with Dongfeng and FAW, while the military-industrial operations of the Ordnance Equipment Group will be integrated into the Ordnance Industry Group.
FAW, Dongfeng, and Changan are the three major central enterprise groups in China’s automotive industry. Public data indicates that their respective sales volumes in 2024 were 3.2 million, 2.48 million, and 2.68 million vehicles, totaling 8.36 million vehicles.
In February of this year, both Dongfeng Motor Corporation and Changan Automobile had announced that their respective indirect controlling shareholders, Dongfeng Group and the Ordnance Equipment Group, were discussing reorganization plans with other state-owned enterprise groups. Subsequently, there were widespread rumors in the market about a potential merger between Dongfeng Motor Corporation and Changan Automobile. However, the latest announcements indicate that the merger plans have fallen through.
This internal adjustment within central enterprises comes amid the backdrop of significant restructuring in China’s automotive industry. The mainland financial and economic self-media outlet “Liu Xiaobo’s Economic Insights” pointed out that the industry is facing severe consolidation pressures, with both central and state-owned enterprises needing to increase scale to reduce costs, or risk being phased out.
Although Chinese state-owned enterprises have resource advantages, some private companies are outperforming them in operations. Data shows that in 2024, two Chinese companies, BYD and Geely, entered the top ten global rankings by total sales volume, while the three major central enterprises failed to make the cut.
The split of the Ordnance Equipment Group coincides with a period of high-level purges within the CCP’s military-industrial central enterprises, with key figures from both China Ordnance Industry Group and China Ordnance Equipment Group falling from grace. The former mainly engages in military equipment research, design, and manufacturing, while the latter is involved in tank and armored vehicle development as well as ammunition supply.
The General Manager of the China Ordnance Equipment Group changed twice within a year. In April 2024, Zhang Yujin, the former Deputy General Manager of China Commercial Aircraft Corporation, was appointed as the General Manager of the China Ordnance Equipment Group, replacing Chen Guoying, whose whereabouts remain unknown. There were earlier rumors suggesting that Chen Guoying had been taken away for investigation. In February 2025, Zhang Yujin was reassigned as the General Manager of China Aviation Engine Group, while Zhou Zhiping, the former General Manager of Dongfeng Motor Corporation, took over as the General Manager of the China Ordnance Equipment Group.
On February 12, 2025, Liu Weidong, the Deputy General Manager of the China Ordnance Equipment Group, was placed under investigation. Liu previously held positions such as Deputy General Manager of Dongfeng Motor Company.
In December 2023, Liu Shiquan, the former Chairman of China Ordnance Industry Group, had his qualifications as a National Committee member of the Chinese People’s Political Consultative Conference revoked. On April 30, 2024, Cheng Fubo assumed the position of new Chairman of China Ordnance Industry Group, while the former Chairman, Liu Shiquan, disappeared without a trace.
Renowned international political commentator Chen Pokong mentioned in an interview with journalists from Dajiyuan that the involvement of senior officials in CCP military-industrial enterprises is not merely related to corruption, but also implicates issues of espionage. For example, critical military intelligence on CCP aircraft carriers, warships, submarines, and more has allegedly been leaked to Western countries such as the United States. As the CCP cannot openly address these sensitive matters, they often use anti-corruption efforts as a guise to handle individuals involved in such activities.