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Dongfeng to quadruple output, sales
By Gong Zhengzheng (China Daily)
Updated: 2004-06-07 08:54

Dongfeng Motor Corp, one of China's top three automakers, wants to nearly quadruple both its output and sales within the next five years.

The State-run Dongfeng, based in Wuhan - capital of Central China's Hubei Province - has set the target to lift output and sales to 1.7 million vehicles annually by 2008, up from 469,000 units last year, according to the company.

It is also pushing for 180 billion yuan (US$21.7 billion) and 15 billion yuan (US$1.8 billion) in annual sales revenue and profits during the period, up from 79.2 billion yuan (US$9.5 billion) and 6.2 billion yuan (US$748.7 million) in 2003, respectively.

"Our target for this year is to both produce and sell more than 600,000 vehicles and there will be no problems in exceeding 1 million units over the next two to three years," Miao Wei, president of Dongfeng, told China Daily.

Both of China's top two automakers - First Automotive Works Corp and Shanghai Automotive Industry Corp - have said that their output this year will reach 1 million vehicles.

"We will continue to strengthen co-operation with foreign partners because it will help Dongfeng improve management and produce better quality in a shorter period of time amid increasing competition due to China's World Trade Organization (WTO) entry," Miao said.

WTO membership, which started at the end of 2001, is expected to put great pressures on Chinese automakers.

Dongfeng is now in talks with French automaker Renault to build a passenger car joint venture in China.

If the project comes true, Dongfeng will have five foreign vehicle venture partners, the biggest number by a single Chinese automaker.

Dongfeng so far has ventures with PSA Peugeot Citroen, Nissan, Honda and Kia Motors.

"We will introduce more and more new products to Chinese customers as part of efforts to fulfill our targets," Miao said.

The venture with Nissan, Dongfeng Motor Co Ltd, will launch the large-sized Teana sedan later this year.

Dongfeng Motor Co Ltd, establish-ed last year and based in Wuhan, is the largest Sino-foreign automobile joint venture in China, with a registered capital of US$2 billion.

The venture yesterday cut the prices of its Sunny and Bluebird sedans by up to 15,000 yuan (US$1,810) and 20,000 yuan (US$2,410), respectively, to increase sales.

The venture with Kia and Yueda - a smaller company in East China's Jiangsu Province - will start to produce the Carnival multi-purpose vehicle later this year.

"Many Chinese automakers have ambitious plans to expand swiftly in the booming domestic vehicle market," said Jia Xinguang, chief analyst with the China National Automotive Industry Consulting and Development Corp.

"However, not all of them will be able to realize their ambition and some will have to be merged or die because there is an overcapacity in the industry"

Beijing Automotive Industry Holdings aims to produce 1 million vehicles each year by 2008.

Even Geely, the privately owned carmaker in East China's Zhejiang Province, also envisions increasing its annual output to 1 million cars by 2010.

Dongfeng will display 10 models during the week-long Beijing International Motor Show, which is due to open on Thursday.



 
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