Changan Automobile’s 3 major shareholders seem to be confident in the brand’s transition
Changan Automobile has secured CNY6 billion (USD824 million) from its three major shareholders to accelerate its transition to new energy vehicles (NEVs). The funds will support the Chinese state-owned automaker’s push into the rapidly growing NEV market.
According to a plan released after the market closed on 6 December Changan will issue new shares at CNY11.78 (USD1.62) each, reflecting a discount of about 16 percent compared to its closing price that day. The new shares will represent no more than 30 percent of the company’s total shareholding.
Moreover, Changan Auto’s stock closed up 0.6 percent at CNY14.07 (USD1.94) per share in Shenzhen, after reaching a peak gain of 2.6% earlier in the day. China Changan Automobile Group (CCAG), the largest shareholder, will invest CNY1 billion.
Meanwhile, China South Industries Assets Management will contribute CNY3.5 billion, and China South Industries Group Corporation, which controls Changan Auto, will invest CNY1.5 billion. Both China South Industries and CCAG are subsidiaries of China South Group Corporation (CSGC).
After the placement, the three shareholders’ combined stake in Changan Auto will also increase to 42.6 percent from 39.7 percent. The CNY6 billion raised will primarily fund strategic projects. Of this, CNY4.3 billion will be allocated to developing Changan’s new energy vehicle platform.
On top of that, this platform, which has a development cost of approximately CNY6.1 billion, will focus on producing sedans, sports utility vehicles (SUVs) and multi-purpose vehicles (MPVs) for both Changan Auto and its NEV brand, Deepal.
Additionally, the funds will support the second phase of Changan’s global research and development (R&D) center and enhance its core technological capabilities, including upgrading its software-defined smart architecture and electric drive systems.
Changan Auto has ambitious goals for the future. By 2030, the company aims to sell five million vehicles annually, become one of the world’s top 10 automakers, and build a globally influential Chinese brand. Last year, Changan sold nearly 2.6 million vehicles, marking an 8.8% increase from the previous year. This funding is a critical step toward realizing these objectives and solidifying Changan’s position in the global NEV market.
