Three cooperative paths lead: The national team of cars join forces to spark "Goldbach's Conjecture"

On December 1st, the three top automobile industry leaders from state-owned enterprises under the State-owned Assets Supervision and Administration Commission (SASAC) met in Wuhan to shake hands, reigniting speculation about a potential merger or strategic reorganization. The so-called "Goldbach Conjecture" of the auto industry—whether the three major state-owned automakers will merge or deepen cooperation—has once again sparked public interest. Fu Yuwu, chairman of the China Association of Automobile Engineering, told the 21st Century Business Herald that the collaboration between FAW, Dongfeng, and Changan should go beyond mere mergers. “Deep cooperation is more effective than simple reorganization,” he said. The three companies signed a framework agreement for comprehensive strategic cooperation in Wuhan, focusing on joint research in emerging technologies, full-value chain operations, international expansion, and new business models. Their goal is to strengthen the competitiveness of Chinese automotive brands and promote market growth. The news sent stock prices of related companies soaring. Dongfeng Motor, Changan Automobile, FAW Xiali, and FAW Car all saw sharp increases, with FAW Xiali hitting a daily limit of 9.1%. However, analysts remain cautious about whether the cooperation will translate into real results. An Qingheng, former chairman of BAIC Group, pointed out that while the alliance is significant, it lacks core strengths in key areas like battery technology. “This is more of a 'great' alliance than a 'strong' one,” he said. He emphasized that the collaboration is primarily about resource sharing and demonstrating the SASAC’s commitment to reform. Zhang Junyi, a partner at Weilai New Energy Industry Development Fund, called the move a national initiative. “First, we must be together, then we can do things together,” he said, highlighting the importance of aligning with national strategies and global trends. Looking back, the path to this cooperation has been long. Since 2015, FAW and Dongfeng have been exploring synergies, and in 2017, Changan joined the effort. The three companies have exchanged leaderships, shared resources, and explored joint ventures in R&D, manufacturing, and logistics. Under the agreement, they plan to create a Smart China Net Auto Innovation Center, focusing on electric vehicles, intelligent networking, and lightweight materials. They also aim to optimize supply chains, reduce costs, and enhance their global presence through the "Belt and Road" initiative. However, challenges remain. Zhao Ying from the Chinese Academy of Social Sciences noted that differences in technical standards, supplier systems, and corporate cultures could hinder progress. “Cooperation among competitors is not easy,” she said. Industry experts agree that while the collaboration brings financial and technological advantages, deep integration requires overcoming internal resistance and aligning interests. For example, FAW’s Red Flag brand still lags behind, and Dongfeng’s independent brand development needs more support. Despite these hurdles, the three automakers are moving forward. Changan has launched the "Shangri-La Plan" to achieve full electrification by 2025, while Dongfeng has committed 20 billion yuan to its new energy strategy. With shared goals and growing investments, the future of Chinese automotive innovation may depend on how well they can work together.

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