Changan Automobile Changes Leadership, What Does It Want to Prove?

Zhu Huarong steps behind the scenes, Zhao Fei takes on the hard bone.

For a Chinese automotive giant with over 160 years of industrial history, elevated to an independent central state-owned automotive enterprise, core management changes are by no means simple succession, but must give an account to the state and capital market.

On October 16, Changan Automobile issued an announcement that Zhu Huarong stepped down as chairman and related positions of the company, focusing his energy entirely on strategic coordination at the China Changan Automobile Group (abbreviated "China Changan") level; former President Zhao Fei took over, serving as chairman of Changan Automobile.

At this time, it has been just over a year since the listing of China Changan, and only a month since the September board restructuring.

[Image Source: Changan Automobile Announcement]

Two adjustments within a short 30 days are a surgery on the long-blurred boundary of rights and responsibilities between the group and the listed company, after Changan Automobile experienced the pain of domestic sales pressure and profit bleeding.

In the eyes of the capital market, Changan Automobile's clarification of rights and responsibilities this time is just the starting point; its new organizational structure must face the market's harshest test. What can Changan Automobile use to prove it can complete a true large-scale turnaround and lead the central automotive enterprise out of the dilemma?

Reshuffles of core management in listed automotive groups are often closely linked to reality pressures at the operational level. Changan Automobile's production and sales data for the first three quarters of this year is precisely the most direct and urgent background driving this adjustment.

According to the production and sales report disclosed by Changan Automobile, cumulative sales volume for the first three quarters of this year was 1.6927 million vehicles, a year-on-year decline of 18.07%. Among the 17 listed automotive companies tracked by "AutosKline", this decline was extremely glaring.

In the same period, SAIC Motor and BYD on a huge base of over 3.1 million vehicles showed only a slight decline, Geely Automobile maintained steady growth of 3.01%, and Chery Automobile even ran against the trend with growth over 10%.

Changan Automobile was not only the only listed car company in the Top 5 with a two-digit decline; its completion rate for the annual sales volume target of 3.3 million vehicles proposed at the beginning of the year was only 51.29%.

Although the overall car market in China this year was unstable, a considerable proportion of listed automotive companies achieved basic stability through new energy transition and exports, even stable with growth.

In the view of "AutosKline", what is more worthy of vigilance than the sales decline is the decline in profitability.

Changan Automobile's net profit attributable to parent company shareholders in the first half of the year was 817 million yuan, a year-on-year decline of 64.32%; non-recurring net profit was 251 million yuan, a decline of 83.01%.

After deductingnon-core factors such as exchange gains/losses and investment income from associates and joint enterprises, the actual core business profit has thinned to the level of less than 100 yuan per vehiclein magnitude; net operating cash flow in the first half of the year was -11.413 billion yuan, with obvious pressure.

[Image Source: Changan Automobile 2026 Semi-Annual Report]

Meanwhile, Changan Automobile's product structural contradictions are also obvious. Its new energy penetration rate for the first three quarters was 41.9%, while data from CAAM for the same period shows the industry penetration rate stood at 53.6%.

The fuel vehicle base is shrinking, and the speed of new energy taking over has also failed to meet expectations.

In addition, Changan Automobile's brand matrix is also clearly divided into hot and cold.

Changan Qiyuan is the only brand that gained acceleration, with sales volume surging nearly 80% year-on-year and achieving quarterly profitability; Deep Blue Automobile although it established its scale, growth rate fell into single digits and financially it has not yet turned losses to profits.

What shocked people the most was the high-end brand Avatr. Cumulative deliveries for the first three quarters were 55,400 vehicles, a significant year-on-year decline of 38.99%, with main models failing to form continuous volume increase.

In comparison, in the 150,000 to 250,000 yuan price range, new forces like Leapmotor and Xiaomi Auto are eroding market share with extremely fast growth. Changan Automobile, like many traditional car companies, is facing a situation of being blocked in front and pursued from behind.

[Image Source: Changan Automobile Production and Sales Report]

The only strong support comes from the overseas market. Cumulative overseas deliveries for Changan Automobile for the first three quarters were 729,700 vehicles, a year-on-year increase of 56.8%; overseas gross margin in the first half of this year was 20.13%, far higher than the domestic 11.67%.

But comprehensively speaking, "AutosKline" believes that Changan Automobile's current dilemma is not the failure of a single product or a brand, but the speed of old base decline, the profit rhythm of new business, and the organizational structure's response efficiency to market changes. These three forces not only failed to form synergy, but instead constrained each other.

Facing this slightly heavy report card, it is not difficult to understand the real intention of the baton handover between Zhu Huarong and Zhao Fei.

Since the listing of China Changan over a year ago last July, Zhu Huarong concurrently served as chairman of both the group and Changan Automobile, and multiple executives also served in cross-appointments at the two levels of entities.

This is a necessary arrangement during the transition period of the new central SOE establishment, understandable. However, after the group system is basically formed, the cost of cross-appointment starts to show.

Decision chains are long, management responsibility is vague, and Changan Automobile lacks a frontline commander who truly takes full responsibility for operating results when facing the ever-changing market.

After this adjustment, Zhu Huarong focuses on the group level, responsible for "setting strategy, allocating resources, promoting synergy, controlling risk, strengthening incentives"; Zhao Fei concurrently serves as chairman of Changan Automobile in the identity of Group General Manager, and the president position is taken by Ye Pei, who grew up internally.

In the view of "AutosKline", the intention of this personnel adjustment is very clear: the group manages direction, Changan Automobile fights the market. But no matter how perfect the design on paper, making Changan Automobile's huge body truly run is another matter.

The true test after clarifying rights and responsibilities lies in whether Changan Automobile has truly obtained decision authority and accountability mechanisms compatible with independent operation.

If it cannot truly break the traditional shackles of central and state-owned enterprises in mechanisms, this adjustment is more likely to fall into another form of hesitation and internal friction.

From the current situation, things seem to be developing in a good direction. At least from the statements of Changan Automobile's management, they have profoundly realized the importance of "efficiency" under the current market conditions of extreme involution.

At the media communication meeting on October 16, Zhu Huarong explained this new mechanism, stating that decision processes originally taking two months need to be compressed through governance reform, and approval timeliness for some matters should be shortened to even 1 to 2 hours.

For Zhao Fei who stepped onto the front stage, the real tough battle has begun. Stopping and stabilizing the domestic base and building the overseas system, neither side can wait.

Zhao Fei has not experienced adversity. When he took office at Changan Ford in 2018, the strategic adjustment he led achieved sales stop of decline in 2020, and growth exceeded 20% in 2021.

This experience proves he has the ability to find and solve problems under pressure. However, what he is facing now is a much more complex chessboard than back then.

In the domestic market, fuel vehicle market shrinkage is industry-wide, but for Changan Automobile, the growth speed of its new energy still failed to run faster than the bleeding speed of its own fuel vehicle base.

Since external incremental is difficult to quickly make up, Changan Automobile can only look for efficiency and profit improvement space internally, accelerating resource integration.

At the end of September this year, Avatr and Deep Blue Automobile established the AD Collaborative Development Department, implementing the "front-end independent, middle and back-end synergy" model, expecting to reduce costs by 20% to 30%.

At the same time, Changan Automobile is also thoroughly clarifying brand positioning, anchoring Avatr to 300,000 to 500,000 yuan new luxury, Deep Blue Automobile focuses on 150,000 to 250,000 yuan mid-to-high-end, and Changan Qiyuan focuses on mainstream families. In addition, the product portfolio plans to streamline from 63 models to 36 models, concentrating resources to create global flagship products.

"AutosKline" believes that Changan Automobile's direction in this aspect has precedents. After Geely Automobile's "One Geely" strategy was promoted, administrative expense ratio dropped by 17.1% and core net profit attributable to shareholders grew by 36% in 2025.

But for Geely Automobile from starting integration to expense ratio significantly improved, a complete fiscal year passed. It is highly unlikely that Changan Automobile will enjoy synergy dividends sooner.

So, another card in Zhao Fei's hand, going overseas, appears exceptionally important. At this stage, the model of relying solely on complete vehicle export is approaching the ceiling, and the European Union's tariffs on Chinese-made electric vehicles are putting pressure on price competitiveness.

Zhao Fei explicitly stated that the past model of "domestic polishing completed then output overseas" is no longer adaptable. In the future, it needs to integrate global user needs to create global flagship products, and push capacity to the front of the market.

Changan Automobile's Thailand Rayong factory has started operation. European base planning aims to form 180,000 vehicle capacity by 2028. The leap from product overseas to system overseas is a brand new topic for any Chinese car company. This needs to be verified in units of years.

Looking back, Changan Automobile's situation reflects the common proposition of transformation of China's traditional car companies.

It possesses the most profound historical foundation, yet at the same time is a youngest central automotive enterprise.

Compared to BYD's extreme vertical integration efficiency and Geely Automobile's flexible market-oriented operation, the mechanism differences of large central and state-owned enterprises like Changan Automobile in decision speed, incentive elasticity, and tolerance space cannot be leveled by a single personnel adjustment.

Facing the new round of industrial upgrading requirements of the "15th Five-Year Plan", Changan Automobile's breakthrough must touch the root, using the mechanism of the youngest central enterprise to break the heaviest historical inertia.

This leadership change opened a window for Changan Automobile's internal mechanism reform. But what truly decides the direction is whether clarifying rights and responsibilities can bring true operating autonomy, whether R&D and marketing can have larger trial and error space, and integrate central enterprise resources with private enterprise vitality deeply.

Views of AutosKline:

In the first half of this year, Zhu Huarong said a sentence: "Volume first, profit later, from this year onwards emphasize both volume and profit." This sentence placed on today's Changan Automobile is more appropriate than ever before. Personnel baton handover is completed. This oldest car company must, with the posture of the youngest central enterprise, complete reshaping under the attack of historical baggage and transformation pain.

Changan Automobile must be anxious to prove that under the dual pressure of sales volume and profit, a clearer, more efficient, and market-and-globalization-oriented governance structure can lead it to regain growth. Changing leadership itself is not the goal; using leadership change to lever efficiency, responsibility, and the systematic switch of tactics is what it really wants to prove. Of course, whether this new architecture can ultimately be proven effective, the only referee is the sales volume and profit numbers in the following period.

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