Changan Automobile is merging the operational functions of its Avatr and Deepal brands into a single new department. This restructuring aims to streamline costs as the company pursues a massive global sales target of 1.5 million vehicles.
Scaling toward 1.5 million global sales and 40% exports
Changan's current combined volume for Avatr and Deepal reached 453,000 vehicles last year. To reach the target of 1.5 million annual global sales, the company must more than triple its current output. a significant part of this strategy involves a major geographic pivot; while Deepal currently sees only 10% of its sales in overseas markets, Changan wants overseas sales to exceed 40% of the total group volume.
The AD Synergistic Development Department's plan to dissolve Deepal units
The newly formed AD Synergistic Development Department will consolidate marketing, human resources, and finance functions. According to information obtained by Yicai, the restructuring involves more than just administrative changes. Avatr is expected to establish collaborative centers for styling and platform technology to handle work for Deepal, while Deepal is expected to dissolve several of its existing business units to facilitate this integration.
Leveraging Avatr's Huawei-linked tech for Deepal's volume
Avatr maintains a close partnership with Huawei Technologies to provide intelligent driving and cockpit technology. By integrating Avatr's development and platform work with Deepal's higher-volume production, Changan could potentially spread these Huawei-linked capabilities across a much larger number of vehicles. This move could significantly lower per-vehicle costs, though as the report says, the exact scope of Huawei's involvement in the new shared centers has not been disclosed.
Uncertainties for Avatr’s June Hong Kong listing
The restructuring comes at a sensitive time for Avatr, which refiled its application for a Hong Kong listing in June. while Avatr Technology President Chen Zhuo has stated that the strategic changes will not affect the IPO plans, investors may still have concerns. specifically, market analysts will be watching to see how shared functions and asset boundaries are structured in future prospectuses to ensure clear financial reporting regarding margins and related-party arrangements.
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