Dongfeng Motor Parts And Components Group Co., Ltd. Business Report FY ended Dec. 2018
Recent Development
-Dongfeng Electronic Technology Co., Ltd. announced a plan to acquire Dongfeng Motor Parts And Components Group by issuing new shares to shareholders of Dongfeng Motor Parts And Components, Dongfeng Motor Corporation and Shenzhen DFS industrial group Co., Ltd. The cost for the corporate merger is expected to be around CNY 4.68 billion. After the merger, Dongfeng Electronic Technology will be a remaining company and succeed all assets, liabilities, business operations, workforce, contracts and any other rights and duties of Dongfeng Motor Parts And Components, while Dongfeng Motor Parts And Components will be dissolved after losing its corporate status. All the shares in Dongfeng Electric Technology owned by Dongfeng Motor Parts And Components Group will disappear. As a result, Dongfeng Electric Technology will be owned 86.27% by Dongfeng Motor, 0.09% by Shenzhen DFS industrial group, and 13.64% by other shareholders. When the process for the merger completes, all parts business of Dongfeng Motor Parts and Components will be integrated into Dongfeng Electric Technology, and all the business under current Dongfeng Motor Parts and Components will be listed. Dongfeng Electric Technology also plans to raise CNY 500 million by issuing new shares and allocate the fund to the capital investment in the facilities to make aluminum wheels for passenger vehicles, after the corporate acquisition. (From a press release on February 1, 2019)
New Plant
-On March 12, 2019, Maxion Wheels announced that it has reached an agreement with the Company to form a new joint venture to produce passenger car aluminum alloy wheels. The new company is located in Hubei Province. With an estimated annual sales of 700 million yuan, the new company's annual production capacity reached 2 million passenger car aluminum wheels. The new company is expected to start construction in May and will be completed and put into operation in July 2020, creating 450 new jobs. On June 6, 2019, the new company held a a groundbreaking ceremony at the future site of their 22,000-square-meter plant in Suizhou, China. (From a press release on March 15, 2019 and June 7, 2019)
-On January 17, 2018, Dongfeng Brose Automotive Systems Co., Ltd. announced that the company is now constructing a new plant in the Economic & Technological Development Zone in Wuhan City, Hubei Province, with an investment of Chinese yuan (CNY) 500 million. The new plant is expected to be completed in the second quarter of 2018. All its facilities will be completed and the workforce to be relocated in the third quarter. Established in 2007, Dongfeng Brose Automotive Systems supplies door systems, window regulators and seat systems to automakers such as Dongfeng-Peugeot-Citroen Automobile, Changan Ford, Geely, Chery, GAC FIAT, Fujian Daimler, BYD, Lear, Renault and Dongfeng Getrag. (From a press release on January 25, 2018)
New Companies
-The Company celebrated the openings of Dongfeng Automobile Chassis System Co., Ltd. and Dongfeng Electric Drive System Co., Ltd. on November 17 and 18, 2018, respectively. The former integrates four automotive component suppliers under the Dongfeng Automobile Group, and its registered capital is CNY 479 million. Its primary products are automobile chassis parts and assemblies such as steel wheels, aluminum wheels, steel leaf springs, air suspensions, and drive shafts. The latter was established as Dongfeng Electronic Technology Co., Ltd. acquired Dongfeng Motor Electric Equipment Co., Ltd. and merged it with its affiliate Dongfeng Automobile Electronics Co., Ltd. Its primary products include driving motors, motor controllers, vehicle controllers, instrument meters, automotive electronics, sensors, alternators, and starters. (From a release on Dongfeng Automobile Group website on November 19, 2018)
-Dongfeng Motor announced on October 31 that Dongfeng Fawer Pump Co., Ltd. (Dongfeng Fawer Pump) held an opening ceremony in Shiyan City, Hubei Province. Dongfeng Fawer was established by Dongfeng Motor Parts and Components Group Co., Ltd. (Dongfeng Parts) and Fawer Automotive Parts Limited Company (Fawer), a subsidiary of FAW Group. The opening of the joint venture highlights the substantive cooperation in capital operation, ownership reform, technology research and development, and resource coordination between the two companies. Registered in July 23, 2018, Dongfeng Fawer Pump will begin operations in November 1. It aims to achieve an annual production value of over CNY 250 million in five years.
On June 14, 2017, Dongfeng Parts and Fawer signed a strategic cooperation framework agreement in Changchun City, Jilin Province. On May 31, 2018, the partners signed a contract in Wuhan to establish Dongfeng Fawer Pump.
-On May 31, 2018, Dongfeng Motor Parts And Components Group Co., Ltd. and Fawer Automotive Parts Limited Company signed an agreement on the establishment of a new joint company. The two parties are going to invest Chinese yuan (CNY) 15 million and CNY 35 billion, respectively, in setting up Dongfeng Fawer Pump Co., Ltd. The new company will be owned 30% by Dongfeng Motor Parts And Components and 70% by Fawer Automotive Parts. In the future, the joint company is going to deepen the alliance with Dongfeng group companies and supply oil pumps, water pumps and electric pumps and other pumps for commercial, passenger, and new energy vehicles. The new joint company will be built in Shiyan New Industrial Park, Hubei. It's expected to generate sales of CNY 260 million in 2023. (From a press release on June 4, 2018)
-On May 13, 2018, Dongfeng Motor Parts And Components Group Co., Ltd. and US Cooper Standard singed a joint venture agreement in Wuhan. The two companies are going to set up a joint manufacture of piping systems and sealing materials. The new company's main products are fuel lines, brake lines, fuel delivery systems and automotive sealing systems. It also will take over the piping business from Dongfeng Motor Pump Co., Ltd. The new company's headquarters plant will be in Wuhan. It also will build a plant in Shiyan based on the piping plant of current Dongfeng Motor Pump. The plant in Wuhan will make products for passenger car manufacturers, and the plant in Shiyan will produce products for commercial vehicles manufacturers and other clients. (From a press release on May 16, 2018)
-On March 26, 2018, Dongfeng Motor Parts And Components Group Co., Ltd. and Federal-Mogul Holdings LLC of the U.S. have signed an agreement on the establishment of a new joint company. The two companies are going to make a collective investment of Chinese yuan (CNY) 400 million to build a plant in Dongfeng Motor Parts And Components Group's industrial park in Zhangwan, Shiyan. The joint manufacturer is going to design, manufacture and sell pistons for internal-combustion engines. The new company is expected to generate sales of CNY 380 million in 2022, exporting some of its products to North America. The joint company is to design and produce high-performance pistons for engines for China and the Dongfeng Group, to improve heat-efficiency of conventional fuel-powered engines, contribute to the reduction of carbon emissions, and comply with several environmental protection laws. (From a press release on March 27, 2018)
Acquisition
-On July 7, 2018, Dongfeng Electronic Technology Co., Ltd. announced a plan to consolidate the new energy vehicle businesses of the group and acquire 100% shares in Dongfeng Motor Electric Equipment Co., Ltd. at the cost of Chinese yuan (CNY) 200 to 250 million. The scheme is going to allow the company to complete its electric power system business. Currently, Dongfeng Motor Parts And Components Group Co., Ltd. owns a 98.78% stake in Dongfeng Motor Electric Equipment and the company is planning to buy the remaining 1.22%, within two months from now. After all these transactions, Dongfeng Electronic Technology is going to buy all the shares from Dongfeng Motor Parts And Components Group. (From a press release on July 9, 2018)
Strategic Cooperation
-On November 19, 2018, the Company signed an agreement with Knorr-Bremse Asia Pacific (Holding) Co., Ltd. The two companies are going to extend their scope of the alliance to include the business relating to steering for commercial vehicles and enhance the product lineup of their joint venture. They intend to use the strengths of each company in the steering segment to complement each other, formulate a system combining intelligent control and braking and steering technologies for vehicles while hoping to advance themselves for smarter driving. In 2015, Dongfeng Motor Parts And Components Group’s braking division and Knorr-Bremse established a joint venture Knorr-Bremse Dongfeng Electronic & Technology (DETC) Commercial Vehicle Braking Technology Co., Ltd. In May 2017, Dongfeng Motor Parts And Components Group’s air compressor division was integrated into this joint venture. (From a release on November 23, 2018)