Changan Unites Deepal and Avatr Brands Amidst Chinese Auto Industry Consolidation
Translated & summarized from Calcalist by baba
The story in 5 lines · by baba
- Changan is merging Deepal and Avatr brands' operations.
- The merger aims to reduce operational costs by approximately 30%.
- Deepal and Avatr will remain separate product brands.
- This is part of a wider consolidation trend in China's auto industry.
- Other recent deals involve GAC, FAW, Geely, and NIO.
Chinese automaker Changan is merging the research and development, supply chain, and production operations of its Deepal and Avatr car brands. This move is part of a broader trend of consolidation within China's automotive industry, aimed at reducing operational costs by an estimated 30% for the two brands. Under the new structure, Avatr will lead the R&D centers, while Deepal will focus on business development. Despite the integration of their R&D divisions, both Deepal and Avatr will continue to exist as distinct product brands.
This consolidation follows several other recent mergers and acquisitions in the Chinese auto sector. Earlier, GAC announced that FAW Group would acquire a significant stake, making FAW the second-largest shareholder in GAC. Additionally, Geely is in the process of acquiring a 30% stake in NIO POWER, a battery-swapping network for electric vehicles operated by NIO. These developments are indicative of ongoing efforts within Chinese automakers to streamline operations and cut costs through strategic alliances and mergers, a strategy previously employed by Geely itself in its internal R&D divisions.
Read the original at Calcalist