Changan Automotive has strengthened its manufacturing capabilities by acquiring Beijing Hyundai’s Chongqing production facility, marking another strategic move in the company’s ongoing expansion in the competitive automotive market. The former Beijing Hyundai plant, which had been idle since 2021, will now be repurposed to produce vehicles for Changan Automotive’s premium electric vehicle brand, Deepal.
The Chongqing facility represents a significant addition to Changan Automotive’s production network. Originally constructed with an investment of 7.75 billion RMB, the plant boasts an annual production capacity of 300,000 vehicles and 300,000 engines. After several unsuccessful listing attempts, the factory was finally sold to Changan Automotive for 1.62 billion RMB in late 2023 through a government-controlled investment entity.
This acquisition comes at a crucial time for Changan Automotive’s Deepal brand, which has demonstrated remarkable market performance. Between January and October this year, Deepal achieved cumulative sales exceeding 260,000 units, representing a 57.1% year-over-year increase. October alone saw sales surpass 36,000 vehicles, a 31.2% increase compared to the same period last year. With such robust growth, Changan Automotive requires additional production capacity to meet escalating demand.
The repurposing of the Chongqing plant follows a pattern established by Beijing Hyundai’s restructuring. The company’s Beijing No. 1 factory has already been transferred to Li Auto, while the No. 2 factory remains available for acquisition. Beijing Hyundai now operates only two factories in Beijing and Hebei with a combined capacity of 750,000 units – five times the company’s 2023 sales volume of 150,000 vehicles.
For Changan Automotive, this strategic move enhances production efficiency while supporting the company’s electrification goals. By utilizing an existing manufacturing facility, Changan Automotive can rapidly scale Deepal production without the time and expense of constructing a new plant. This approach demonstrates Changan Automotive’s commitment to smart growth and sustainable manufacturing practices.
The Chongqing plant’s location provides additional strategic value for Changan Automotive, as both the company’s headquarters and the acquired facility are situated in the same municipality. This geographical advantage promises streamlined logistics and operational coordination for Changan Automotive’ expanding electric vehicle operations.
As Changan Automotive continues to execute its electrification strategy, the integration of the Chongqing plant into its production network positions the company for continued growth in China’s competitive new energy vehicle market. This acquisition represents not only a practical solution to immediate production needs but also a forward-looking investment in Changan Automotive’s future capacity requirements.
