Dongfeng Plans $7.1B Privatization, Voyah EV Spin-Off

Dongfeng Motor Corp has announced plans to take its Hong Kong-listed unit, Dongfeng Motor Group, private in a HK$55.1 billion (US$7.1 billion) deal while simultaneously spinning off its EV arm, Voyah, for a separate Hong Kong listing.

Under the privatization plan, Dongfeng will offer HK$6.68 (US$0.85) per share, representing an 11.9 percent premium to the last closing price before trading was halted on August 8. The move comes amid intense price wars in China’s automotive sector, which have led to rising costs, shrinking profit margins, and mounting regulatory scrutiny. In the first 11 months of 2024 alone, the industry recorded cumulative retail losses of 177.6 billion yuan (US$24.7 billion), with profits declining 5.1 percent, despite modest revenue growth.

Key Highlights

• Dongfeng to privatize Hong Kong-listed unit in $7.1B deal
• EV arm Voyah to list separately in Hong Kong for global exposure
• Move comes amid China’s auto price wars and industry restructuring

Automakers, including BYD, have slashed prices by up to 34 percent to clear excess inventory, exacerbating industry pressures.

For Dongfeng, privatization will lower reporting costs and simplify operations, while the Voyah EV spin-off aligns with China’s national strategy to boost competitiveness in the electric vehicle sector. Dongfeng, which owns nearly 80 percent of Voyah, believes a separate listing will generate global visibility and attract specialized EV investors, while keeping traditional operations under state oversight.

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This restructuring reflects broader industry consolidation, as rivals like Geely halt capacity expansion to optimize existing facilities. It also comes as regulators crack down on questionable sales practices, including “zero-mileage” registrations. By restructuring, Dongfeng aims to future-proof its EV business while stabilizing its traditional operations.