Dongfeng Motor: CASE alliance with FAW and Changan, and aggressive expansion into Africa

Dongfeng Honda sales steady, French and Korean JVs sluggish

2020/01/17

Summary

東風汽車グループの販売台数

 Dongfeng Motor Group Co., Ltd. (hereinafter Dongfeng Motor Group), which changed its name from Dongfeng Motor Corporation in November 2017, is headquartered in Wuhan, Hubei Province, and is the second largest government-affiliated automotive group company in China in terms of the number of vehicles sold (2018). Although the Dongfeng Motor Group steadily increased its annual sales volumes every year in the past, its sales volumes have been trending downwards since 2017, falling 7.0% in 2018 year-over-year (YoY) to 3.783 million units, the same level as that in 2014. Approximately 70% of the group's sales are dependent upon its foreign equity joint ventures.

 Against the backdrop of reforms and reorganizations of state-owned enterprises being promoted at the national level, the three Chinese government-affiliated companies China FAW Group Co., Ltd. (FAW Group), the Dongfeng Motor Group, and Chongqing Changan Automobile Co., Ltd. (Changan Automobile), signed a strategic framework agreement in December 2017. Looking to the future, the 3 OEMs plan to construct a collaborative system focusing on areas such as technological innovation, supply chain, overseas expansion, and new business models.


 At the beginning of 2019, the Dongfeng Motor Group established its twin 400 targets (operating income of CNY 40 billion, and sales volumes of 4 million units), but is unlikely to overcome the obstacles to achieve those targets because the number of vehicles it sold in the January to October 2019 timeframe fell to 2,851,000 units, reflecting a decline of 6.1% YoY. Sales of Dongfeng’s foreign equity joint ventures, with the exception of Dongfeng Honda Automobile Co., Ltd., have also fallen YoY. In the midst of these financial circumstances, on December 18, 2019, Groupe PSA (PSA) announced that it would be merging with Fiat Chrysler Automobiles N.V. (FCA). Dongfeng Motor Group agreed to sell a part of its shares in PSA resulting in a reduced equity stake in PSA; PSA is one of the major shareholders in Dongfeng PSA (Dongfeng Peugeot-Citroën Automobile Co., Ltd.).

 

 


Related reports:

Wuhan International Commercial Vehicles Show 2019: Dongfeng, FAW, Shaanxi, Foton, JAC, JMC(Dec. 2019)
SAE China 2019 (1): CASE initiatives of China OEMs and DiDi’s high-precision mapping(Nov. 2019)
CTI Symposium China 2019:Automotive drivetrains, Intelligent, Electrified (Nov. 2019)
China NEV Alliances(Aug. 2019)
Auto Shanghai 2019:Exhibitions by Chinese State-Owned Automakers(May 2019)