Dongfeng Three Companies Announced Merger Announcement; Big State Enterprises Continue to Slimming Down

On December 19, Dongfeng’s three companies issued a consolidated announcement: Dongfeng Huashen Automobile Co., Ltd. absorbed and merged Dongfeng (Shiyan) Special Commercial Vehicle Co., Ltd. and Dongfeng (Shiyan) Special Body Co., Ltd.

After the merger, Dongfeng Huashen Automobile Co., Ltd. survived. Dongfeng (Shiyan) Special Commercial Vehicle Co., Ltd. and Dongfeng (Shiyan) Special Body Co., Ltd. were cancelled according to law. The creditor's rights and debts of the merger parties were all borne by the surviving company.

These three companies are subsidiaries of Dongfeng Special Commercial Vehicles Co., Ltd., and their headquarters are located in Shiyan. The predecessor of Dongfeng Huashen Motor Co., Ltd. is Dongfeng Shenyu Vehicle Co., Ltd., and the company name just changed on December 8 this year.

On November 4, Dongfeng officially announced Huashen, a new commercial vehicle brand. Its goal is to become a leading brand in the special vehicle/special vehicle segment market. In this way, Dongfeng’s division of commercial vehicle business is more rational, forming the brand pattern of “one main and two pairs of arrows and three arrows” (Dongfeng, Chenglong, Huashen).

After the merger of the three companies, Dongfeng’s special vehicle/special vehicle business will be further focused. It seems logical to merge. According to the "Automotive Business Review," the merger of Dongfeng three companies has also released a signal that Dongfeng Motor will continue to prune its branches and cut leaves to focus on resource expansion instead of stocking development.

Integrating resources is the focus of this year's Dongfeng Motor. At the meeting of Dongfeng Motor Corporation on April 18, Chairman Yan Yanfeng said: “If the market-driven orientation makes it impossible for the company’s network survival and product survival to continue, it will inevitably move toward integration.”

At the same time, Dongfeng Motor gradually withdrew non-core business and further concentrated its resources to develop its main business.

On June 25, Dongfeng Electric Vehicle Co., Ltd., a subsidiary of Dongfeng Motor, signed an asset transfer agreement with Dongfeng Real Estate at a price of RMB 204 million to transfer its investment property and land use rights in Wuhan Wuhan Economic and Technological Development Zone. The money will be used for the development of electric vehicle business.

On September 20, Dongfeng Motor approved the transfer of 85% equity of Dongfeng Industrial Co., Ltd. Dongfeng Industry is a collective-ownership enterprise established by Dongfeng to solve the employment problem of Dongfeng workers' family members.

In December, Dongfeng Motor plans to sell 80% of Dongfeng Automobile Real Estate Co., Ltd. for approximately 872 million yuan.

Yan Yanfeng clearly stated that it is necessary to make breakthroughs in institutional issues. “In 2017, Dongfeng Company will continue to solve the problems left over by history, strengthen the work of reducing weight and deepening decompression, improve group management and services, and rejuvenate market players with the aim of accelerating institutional and institutional breakthroughs. Substantively advance the comprehensive deepening of reforms."

For such a state-owned enterprise with complex equity and huge business, downsizing is not an easy task. However, if this reform can be carried out smoothly, Dongfeng Motor will be lightly loaded, can use more market-oriented ways to activate the company, and enhance the company's market competitiveness.