Strategic cooperation agreement signed
On the 1st of December 2017, Changan Automobile signed a strategic cooperation framework agreement with FAW Group and Dongfeng Motor Corporation. The signing happened in Wuhan, Hubei province, China.
Changan Automobile, FAW Group, and Dongfeng Motor Corporation are all state-owned enterprises. The development of this partnership is in line with the Chinese government belt and road initiative, strengthening Chinese companies and pushing for international relevancy.
The agreement
The agreement stipulates that the 3 companies will cooperate in the development of technology, the value chain of the auto industry, and strategy for expanding globally and into new business models.
This agreement is to promote the national and global development of the Chinese auto market and enhance the strength of Chinese auto manufacturer technology and brands.
Together, the 3 companies will jointly develop 3 big projects:
Firstly, they will help establish the national innovation centre for intelligent connected vehicles.
Secondly, they will establish advanced technology innovation centre that will develop in the fields of new energy, internet connectivity and lightweight materials.
Thirdly, they will jointly invest into and develop core technologies and a platform to share.
The reasons
Building synergy between the 3 companies and strengthening their vehicle platforms and powertrain will reduce development overheads. Cooperation in manufacturing, purchasing, and logistics might unlock not just synergies but higher economies of scale, leading to significant savings. Finally, in line with the belt and road initiative, they will develop foreign market opportunities together, which not only enhances China’s global brand but opens up new revenue streams.
China is pushing to change its image internationally and transform its economy and future. If you read EV Obsession or CleanTechnica, you will have read about Changan’s Shangri-La plan and many other recent developments in the Chinese electric car market. Other highly notable stories include BAIC’s plans to go 100% electric by 2025, the Chinese green licence plate scheme going national, and Ford’s plans to bring 15 electrified vehicles to China by 2025.
Sources: Changan, Gasgoo, and Kathrin Shen
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