Changan Automobile Can't Wait | EV Deep Dive

At the critical juncture of new energy transformation, everyone is pulling out all the stops, but Changan Automobile pulled off the harshest move — changing leadership.

Recently, Changan Automobile Co., Ltd. (Changan Automobile) suddenly issued an announcement that Zhu Hairong resigned from the positions of Chairman, Director, and Legal Representative, no longer holds any position in the company and its controlled subsidiaries, and continues to serve as Party Secretary and Chairman of China Changan Automobile Group Co., Ltd. (China Changan).

At the same time, the board elected Zhao Fei as Chairman of Changan Automobile, appointed Ye Pei as President, Yang Dayong as Executive Senior Vice President, and Deng Chenghao as Executive Vice President.

The announcement stated that this adjustment aims to leverage China Changan Automobile's role as a specialized automotive industry group in "formulating strategy, allocating resources, promoting synergy, controlling risk, and strengthening incentives".

Zhu Hairong added in the media interview on that day, explaining the intention is to clarify the governance boundary between the group and the listed company, the President position will be generated internally from within the company, and will no longer be directly concurrently held by group leadership members.

Since this personnel adjustment involves Changan Automobile's top leader Zhu Hairong, especially just last month he just completed his re-election as Chairman, yet now resigns directly, sparking many speculations within the industry.

For the newly appointed Zhao Fei, being at the critical juncture of Changan's new energy transformation is enough to show the heavy responsibility entrusted by the group. Currently, Changan Automobile's fuel vehicle share continues to decline, new energy has not yet been able to shoulder the sales burden, and multi-brand operations face challenges, indicating that Zhao Fei's pressure is significant.

Changan Automobile's Ledger

First look at September. Changan Automobile sold 215,400 units, down 19.11% year-on-year. Among them, new energy 119,800 units, up 15.64% year-on-year, accounting for 55.6% of group sales; overseas 94,200 units, accounting for 43.72%.

Looking at the structure, this is a decent performance. New energy accounts for over half, overseas exceeds 40%, fuel vehicles are no longer the main force. According to CPCA data, domestic passenger car retail in September decreased by 28% year-on-year. Maintaining this structure under such a market context shows that the direction of transformation is not wrong.

The problem lies in the cumulative data. January-September, Changan Automobile cumulative sales 1.69 million units, down 18.07% year-on-year; new energy cumulative 709,300 units, down 2.07% year-on-year. The 15.64% growth in September for new energy is real, but one month's numbers cannot change the trend of the first three quarters. The subsidy panic buying in the same period last year raised the base, and the rhythm of new car launches this year was slower, squeezing both ends, and cumulative data went down.

Looking at brands, the situation of the three businesses differs greatly.

Qiyuan is the only one that stood out. September 46,500 units, August 45,900 units, consistently maintained above 45,000 units for two consecutive months, brand cumulative sales broke 1 million units in September. In the first half of the year, Qiyuan Q05 monthly sales were stable above 15,000 units, ranking first in compact pure electric SUVs for three consecutive months; in Q2, Qiyuan achieved quarterly profit for the first time, average vehicle price increased by 12,000 yuan year-on-year. In this year's price war, being able to increase volume, raise prices, and make profit, getting these three things done simultaneously is not easy.

Deepal's scale stood firm, but the speed slowed down. September 30,200 units, Jan-Sept 252,200 units, up 8.59% year-on-year, 1 millionth vehicle rolled off the line on September 28. Last year's full year growth was 36.6%, this year dropped to single digits. In the first half of the year, Deepal S05 ranked first in sales in the 120,000 to 180,000 yuan pure electric compact SUV sub-sector for four consecutive months, the product itself had no problem, the problem is that the capacity of this price band is limited, and Deepal is still losing money to this day.

The situation of Avatr is the worst. September 8,183 units, down 25.8% year-on-year, Jan-Sept about 51,500 units, only slightly higher than the monthly sales of 30,000 to 40,000 of top new luxury brands. Losses are narrowing, average vehicle price is increasing, HK Stock IPO is also proceeding. High-end brand with monthly sales under 10,000, hard to amortize R&D and channel fixed investment.

The three brands combined 84,900 units in September.

The profit situation explains the problem better than sales. In the first half of the year, Changan Automobile operating revenue 65.634 billion yuan, down 9.71% year-on-year; net profit attributable to parent shareholders 817 million yuan, down 64.32% year-on-year; deducting non-recurring gains/losses net profit attributable to parent shareholders 251 million yuan, down 83.01% year-on-year, of which Q2 deducting non-recurring net profit was only 80 million yuan. Net operating cash flow was negative 11.413 billion yuan, same period last year was negative 8.607 billion yuan.

Sales are growing, but profit and cash flow are deteriorating, indicating that the scale of new energy has not yet reached the level to cover investment. Penetration rate, product structure, partial profitability indicators have been achieved, but overall economic feasibility has not yet been proven.

Overseas data can serve as a reference. In the first half of the year, Changan overseas gross margin 20.13%, domestic only 11.67%; overseas revenue 21.942 billion yuan, up 78.77% year-on-year, accounting ratio of total revenue rose from 16.89% to 33.43%. Current profits, largely overseas gross margin compensating for domestic thin profits. September overseas ratio surged to 43.72% is also due to this reason. But overseas is simultaneously in investment phase, Thailand's Rayong factory, Brazil's Anapolis factory are both ramping up, channels, stockpiling, local teams all need to spend money first, in short term still revenue growth without profit growth.

Industry Coordinates: Leading Second Tier

Comparing Changan among major automotive groups, the position is relatively clear.

Data in the table comes from various company announcements or production and sales quick reports, statistical scope is not consistent, for reference only.

Among these 8 companies, Changan and BYD are the only two with negative numbers, but reasons differ. BYD is actively adjusting structure on a 3.13 million unit scale, shifting increments to overseas, September overseas sales 180,700 units, close to 40% of total sales. Changan is on a 700,000 unit scale, simultaneously held back by product iterations and fuel vehicle clearance.

Paths of several rivals are also worth comparing.

BYD goes all-in on new energy, vertical integration pushed costs to positions others cannot follow, now relies on overseas for increments. 3.13 million unit scale is more than four times Changan's, this path Changan cannot learn yet.

Geely September new energy 190,900 units, penetration rate 65%, also spread across multiple brands, difference is each brand reached top tier in its own price band.

Chery relies on exports for pull. New energy 858,500 units, up 46.1% year-on-year, September exports 207,800 units, set a record. In its new energy increments, a significant portion comes from overseas.

Changan goes with multi-brand plus overseas, form most close to Geely, gap also falls on scale. Qiyuan 46,500 units placed in 80,000 to 250,000 yuan mainstream market not weak, but opposite is Geely Galaxy's 130,500 units and BYD Dynasty plus Ocean's 394,900 units; Deepal 30,200 units stood in 150,000 to 200,000 yuan new energy SUVs, but this pool itself is not big; Avatr 8,183 units in over 300,000 yuan, opposite is monthly sales 37,200 units, doubled year-on-year Zeekr, and AITO and NIO. Three brands combined, only equals two-thirds of one Geely Galaxy.

Problems faced by multi-brands in 2026 are common to the whole industry. Market has shifted from increment expansion to stock replacement, new energy retail penetration rate 67%, independent brand new energy domestic retail penetration rate 84.5%, mainstream joint venture only 15.9%. Share that can be divided is basically divided, remaining is joint venture fuel vehicle final base. Multi-brand originally was to cover blank price bands, now became cutting more slices in the same market, the thinner the cut, the harder to amortize R&D, platform and channel costs for each brand.

Adjustments in these two years all show this direction. Changan combined Avatr and Deepal styling, product development, platform technology, HR and finance into the newly established AD collaborative development department; GAC merged Hyper and Aion into the same business department at the end of 2025. Methods are same, all reduce brand count, increase scale of single brand.

This leadership change is also a continuation of this train of thought. Zhao Fei concurrently serves as listed company Chairman with group General Manager identity, Ye Pei promoted from Executive Senior Vice President to President, Deepal Chairman Deng Chenghao entered listed company Executive Vice President sequence. Purpose of this arrangement is to shorten decision chain between group and listed company, bring Avatr and Deepal synergy from documents to departments. It solves more efficiency problems.

So, let's see where the new core leadership team led by Zhao Fei can lead Changan Automobile.