China’s Dongfeng Motor Co., Ltd. (DFL) outlined its five-year 2008 to 2012 mid-term business plan, targeting sales of 1 million vehicles by 2012.
The five-year plan, named Plan 13 (“one cubed”), expands on the company’s previous business blueprint, Plan 23 (“two cubed”), under which the company doubled sales volume between 2003 and 2007.
DFL sales have grown rapidly in China, reaching 610,000 vehicles in 2007. Based on this growth trend, DFL will target vehicle sales of more than one million units and revenue of RMB 100 billion (US$14.4 billion) by 2012. DFL, Nissan’s local partner in China, will launch more than 10 new passenger vehicles under the Nissan brand and more than five new light commercial vehicles (LCVs) under both the Nissan and Dongfeng brand names.
Part of the sales growth will be supported by local production at a new LCV plant built by DFL at Zhengzhou in Henan province. Production will start in 2010. DFL, Dongfeng Automobile Co., Ltd. (DFAC) and Nissan (China) Investment Co., Ltd. (NCIC) will invest RMB 1 billion (US$145 million), for an installed capacity of more than 120,000 vehicles per year.
Another key element for DFL’s growth strategy will be strengthening of the company’s overseas business to meet commercial vehicle demand in growing markets by doubling the export ratio from 5% in 2007 to more than 10% by 2012 in total sales of LCVs and H&MCVs. Both the number of models and destinations for export will be increased to achieve this objective.
To enhance cost competitiveness, DFL will work towards increasing localization of the passenger vehicles for transmissions, engines and other parts from 70 percent in 2007 to 90 percent in 2012.
DFL aims to boost the number of passenger vehicle sold with continuously variable transmissions (CVTs) to 50% of sales by 2012. DFL also will be exploring alternative fuel trucks, such as liquid natural gas (LNG).
Dongfeng Motor Co., Ltd. was established in 2003 as a result of a strategic partnership between Dongfeng Group and Nissan Motor Co., Ltd. DFL is the first joint venture in China to have a full line-up of passenger vehicles, LCVs and H&MCVs, and has grown faster than then the total market in China.Dongfeng and Nissan each hold a 50% stake.