Changan integrates Avatr and Deepal back-end operations following 41.6% sales slump in China

Mr Zhu Huarong, Chairman of Changan Automobile, has announced a strategic pivot to integrate the back-end operations of its two core NEV brands, Avatr and Deepal. 

The move aims to streamline management and bolster efficiency following a significant downturn for the premium Avatr brand.

"Front-end Divide, Back-end Unity"

The restructuring is a direct response to a stark contrast in Q1 2026 performances. Whilst Deepal delivered 53,601 units (a 5.2% increase), boosted by the global rollout of the S05, Avatr struggled with just 11,703 units sold—a sharp 41.6% decline year-on-year.

By the end of 2026, Changan will implement a new internal structure based on these principles:

• R&D, supply chain, and production units will be merged to reduce overall costs by 20% to 30%.
• Despite the internal merger, both Avatr and Deepal will maintain distinct brand identities, separate product lineups, and independent sales channels.
• Changan has assured stakeholders that the group’s core strategy, brand positioning, and existing user privileges will remain unchanged.

The Strategic "Belt-Tightening"

This move reflects the brutal intensity of the Chinese EV market, where premium brands face immense pressure. Changan is effectively "tightening its belt" by leveraging Deepal’s high production volumes to subsidise Avatr’s high-tech development, ensuring the premium brand remains competitive in the ongoing price wars.

Whilst Avatr has seen steady growth in international markets, the volume remains insufficient to offset the losses in its domestic Chinese market.

Long-term Ambition

The integration is central to Changan’s "1445 Strategy," which targets 5 million global annual sales by 2030. The goal is for NEVs to account for over 60% of sales, with international markets contributing more than 40%. Specifically, Changan expects:

• Deepal: 1 million units per year (Mass market segment).
• Avatr: 500,000 units per year (Premium segment).

On the other hand, Thai consumers are likely to benefit from more aggressive pricing and accelerated tech updates as production costs decrease. Crucially, local service centres are expected to operate as normal, maintaining current customer support standards.

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