Dongfeng to invest over $2billion to expand auto production, targeting 5 million car sales by 2015
February 23, 2011
China’s Dongfeng Motor Corporation, best known for its joint ventures with Honda and Kia, announced that it will invest 14.7 billion yuan ($2.23 billion) to expand its production sites, with the aim of generating yearly capacity of five million vehicles by 2015, the Chutian Metropolis Daily has reported.
The expansion of its production sites, primarily the second Dongfeng Nissan factory, the second Dongfeng Honda factory, Dongfeng’s passenger vehicles engine factory and new commercial vehicle factory, comes as part of Dongfeng’s recently released business strategy for the Twelfth Five-Year Guideline (a national economic growth initiative lasting from 2011 to 2015). According to the plan, the Wuhan-based manufacturer will also focus on further development of its own brand and joint ventures, expansion of new energy technology research and development and improving its market competitiveness overseas.
“We must quickly transform our method of development, rapidly increase our company’s innovation and promote the development of our brand’s business,” stated Dongfeng Board Chairman Xu Ping during an industry summit. Mr Xu continued to say that at the start of the Twelfth Five-Year Guideline, China’s automobile industry has not only been able to develop relatively quickly, but has also encountered a series of problems along the way, including a narrowing market, increased competition, rising costs, decreasing profits and greater influence by resource, environmental and traffic-related factors.
Dongfeng sold 2.61 million vehicles in 2010, becoming China’s second largest domestic automobile enterprise. The manufacturer’s profits for the year were reported to exceed 20 billion yuan ($304 billion), an increase of 50% from five years ago. The company’s goal for 2011 is to sell 2.9 million vehicles.
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