(Yicai Global) May 26 -- Major Chinese carmaker Dongfeng Motor Corporation intends to buy back the controlling stake in Shanghai-listed Dongfeng Automobile from its joint venture with Japan’s Nissan Motor, as part of the JV’s reorganization, Yicai Global has learned.

Dongfeng Motor Company, the joint venture, is considering to sell its entire 60 percent stake in Dongfeng Auto, according to a statement the latter released yesterday. Dongfeng Auto did not name any buyers, but Yicai Global understands from a number of insiders that it is Dongfeng Motor Corporation.

Dongfeng Auto, which makes commercial vehicles and diesel engines, will be peeled off from the JV and become directly controlled and managed by Dongfeng Motor Corporation following the deal, one of the people familiar with the matter said.

“Personnel and other changes at the joint venture related to the spin-off have already begun, and more are expected in the future,” the person said.

Dongfeng Motor Corporation’s reacquisition of Dongfeng Auto should be seen as part of the joint venture’s business restructuring plan, another source close to the JV told Yicai Global, noting that the reorganization aims to streamline the JV and improve its operating efficiency.

Part of the less-than-appealing assets that Dongfeng Motor Corporation injected into Dongfeng Motor Company when the JV was formed with Nissan in 2003, Dongfeng Auto sold only 182,700 vehicles last year.

Dongfeng Motor Company, on the other hand, has been the best-performing business unit by sales and profit for Dongfeng Motor Corporation since it was set up almost 20 years ago, having sold 1.38 million vehicles alone in 2021.

Trading in the shares of Dongfeng Auto [SHA: 600006] has been halted since yesterday. They closed at CNY6.18 (92 US cents) on May 24.

Editors: Tang Shihua, Futura Costaglione