Chongqing - On January 8, Chongqing’s state capital operations hub, Chongqing Yufu Holding Group, signed a 2.5-billion-yuan (about 360 million U.S. dollars) investment agreement with local automaker Deepal.

Deepal, the new energy vehicle brand under Changan Automobile. (Photo/Deepal)

Beyond the auto sector, Yufu has announced plans over the next five years to focus on next-generation electronic information manufacturing, advanced materials, commercial spaceflight, the low-altitude economy, and artificial intelligence. On January 8, the group simultaneously unveiled 32 centrally signed projects, with an intended investment totaling nearly 18 billion yuan.

Founded in 2004, Yufu Holding is China’s first local state-owned, comprehensive asset management company. The Chongqing municipal government defines Yufu as a key vehicle for supporting the operation of state-owned assets, assigning it strategic, policy-oriented functions in the development of local state-owned enterprises.

Deepal is a sub-brand of Changan Automobile, a central state-owned automaker based in Chongqing. It focuses on new energy vehicles and has recently obtained one of China’s first product approvals for L3-level autonomous driving models. According to the company, cumulative deliveries reached 333,000 vehicles in 2025, up 36.6% year on year.

Following the deal, Yufu becomes the second-largest shareholder in Deepal, after Changan Automobile, holding approximately 12.09% of its shares. The move signals a deepening of cooperation between Yufu and a leading local automaker, further supporting the expansion of Chongqing’s automotive industry.

Zhang Min, head of strategy and investment management at Yufu, said a dedicated team oversees the investment and that Deepal’s growth trajectory remains solid. Supporting a lead manufacturer, she added, is expected to catalyze the broader local auto supply chain—delivering gains for individual firms, the industry ecosystem and Chongqing’s wider economy.

Deng Chenghao, vice president of Changan Automobile and chairman of Deepal, said the company has received strong backing from Chongqing across multiple funding rounds, from Series A through C. 

He added Deepal is deepening collaboration with local suppliers to drive innovation and build globally competitive products, and expects closer cooperation with the city’s state capital during China’s next five-year planning period to accelerate its push toward becoming a world-class brand.

The automotive industry is large in scale and has long been valued by local governments for its strong capacity to drive investment and employment. In recent years, China’s government has viewed the new energy vehicle sector as a strategically important emerging industry, pinning high expectations on it to upgrade the automotive value chain and to boost exports and domestic consumption.

Today, competition in China’s auto industry is intense, often manifesting as rivalry between cities and provinces. Beyond attracting external investment, local governments frequently provide strong support for homegrown automakers, tilting policies and capital in their favor. In Chongqing, for example, the auto industry has long been the city’s most critical economic pillar. In 2024, the municipal government proposed building a “city of intelligent connected new energy vehicles.”

For instance, Yufu invested 11 billion yuan as early as 2024 in Avatr, a premium brand under Chongqing-based Changan Automobile. Beyond Chongqing, a well-known case is Hefei in Anhui Province, which has poured substantial state-backed capital into the auto industry, most notably supporting NIO. In Shanghai and Guangdong, local champions SAIC Motor and GAC Group are also backed by state capital.

By January to November 2025, China’s city-level auto production data had been released. Chongqing produced 2.50 million vehicles in the first 11 months, up 12.1% year on year, surpassing traditional auto powerhouses like Beijing, Shanghai, Guangzhou, and Shenzhen. Chongqing is widely expected to reclaim its position as China’s top city by auto output in 2025.