Dongfeng surges nearly 90 percent on restructuring

Vehicles manufactured by Dongfeng Peugeot-Citroen Automobile, a joint venture between Dongfeng Motor and PSA Peugeot Citroen, at a lot in Wuhan, China, on Monday, July 22, 2024. Bloomberg
Vehicles manufactured by Dongfeng Peugeot-Citroen Automobile, a joint venture between Dongfeng Motor and PSA Peugeot Citroen, at a lot in Wuhan, China, on Monday, July 22, 2024. Bloomberg

Shares in Dongfeng Motor (0489) surged almost 90 percent in Hong Kong after the Chinese automaker said its parent company plans to restructure, a move investors speculated could kick start consolidation in the nation’s ultra competitive car market.

Dongfeng Motor is planning a restructuring with other central state-owned enterprise groups that may lead to a change in its controlling shareholder, Dongfeng Motor Group said in an exchange filing Sunday.

Also on Sunday, another legacy automaker in China, Chongqing Changan Automobile said its indirect shareholder, China South Industries, is aiming to restructure with central state-owned enterprise groups too.

Like their counterparts in Europe and the US, China’s legacy automakers have been contending with stiff competition from rising electric vehicle and hybrid stars in China, most notably BYD (1211), which is now China’s top-selling car brand.