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FAW, Dongfeng, Changan deny report of 3-way merger
Automotive News China | 2018/7/24

Three state-owned automakers under the central Chinese government¡¯s direct control -- China FAW Group Corp., Dongfeng Motor Group Co. and Changan Automobile Co. -- dismissed a domestic media report on a planned merger among the companies. 

¡°Media reports that FAW, Dongfeng and Changan will be integrated into one are baseless and contain nothing but untrue information,¡± FAW said Thursday. 

Dongfeng and Changan also issued statements to the same effect the next day. 

On July 18, Xueqiu, a Beijing-based financial news website, reported the three state-owned automakers will be combined to form a new company ¨C China Automobile Group Corp. in August. 

The new company will be headquartered in the northeast China city of Changchun, where FAW is now based, and Changan Chairman Liu Weidong will be appointed chairman of the new company, according to the website. 

The Xiuqiu report was widely picked up by other Chinese media. 

While dismissing the merger report, FAW, Dongfeng and Changan said in the statement that they are cooperating on multiple fronts. 

The three companies recently signed a letter of intent to jointly launch a ride sharing platform after reaching a memorandum of understanding on collaborating in automotive logistics. 

In December, they signed a working agreement on jointly developing vehicles and electric-vehicle technologies, and coordinating expansion overseas.

In addition, the central Chinese government has arranged for the three automakers to exchange senior executives over the past few years. Changan¡¯s chairman Xu Liuping was made FAW¡¯s chairman last year while Dongfeng¡¯s chairman used to be FAW¡¯s chairman.

FAW, Dongfeng and Changan each run joint ventures with foreign automakers but they have failed to develop strong brands of their own.

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