May 18, 2004
Dongfeng Motor Company Passenger Vehicle's Guangzhou Huadu Plant Goes into Operation
Annual Capacity of 150,000 Provides Foundation To Fullfill Business Plan
Guangzhou - China's largest automotive joint venture, Dongfeng Motor Company Limited (DFL), today announced the opening of the Guangzhou Huadu plant. With an initial annual production capacity of 150,000 units, the plant will produce several new Nissan models for the Chinese market, starting with the 2004 model year Nissan Sunny.
DFL has invested RMB1.8 billion (approx 22.97 billion yen, US $217.9 million) in the plant, which occupies a site of 940,000 square meters. The plant will feature Nissan's globally standardized production methods in each of the manufacturing workshops - stamping, body assembly, painting and final assembly - to ensure that customers' vehicles are of the highest global quality.
"The Guangzhou Huadu plant plays a very important role in laying the foundation for DFL to fulfill its business objective of doubling annual vehicle sales to 620,000 units by 2007, as laid down in 'Plan Two Cubed', our mid term business plan." said Mr. Katsumi Nakamura, President and CEO of DFL, at the plant's inauguration ceremony.
Mr. Mamoru Yoshida, DFL's Vice President and Managing Director of DFL Passenger Vehicles added: "Our plan is for annual passenger vehicle sales to quadruple to 300,000 units by 2007. We are determined to meet the needs of Chinese consumers, offering vehicles of the highest global quality. Our goal is to build a brand that offers the best value to customers in China."
Mr. Huang Huahua, Governor of Guangdong province said: "With roots in Guangdong, DFL has become an important element of Guangdong's business development and we at the Guangdong provincial government will further strengthen our support for DFL to facilitate the smooth fulfillment of its business goals."
Following the existing products of 2004 model Bluebird and 2004 model Sunny, DFL plans to introduce the Nissan Teana, a luxury passenger car, later this year. The Teana will be built at another DFL passenger vehicle plant based in Xiangfan, Hubei Province. The new car, which will be premiered at the Beijing Auto Show in June, will be marketed under the Chinese name 'Tian Lai', meaning 'The Beautiful Sounds of Nature'.
Under DFL's Plan 'Two Cubed', six new passenger models will be launched in China by 2007, offering a comprehensive and diverse lineup to appeal to Chinese consumers.
DFL is also expanding and improving its dealer network in order to provide a better service to customers. By 2007, DFL aims to reach over 400 sales outlets throughout China, which will conform to Nissan's global retail management standards.
DFL plans to reach a combined passenger and commercial vehicle target of 620,000 unit sales by 2007, doubling sales from 2003. Total sales revenues for 2007 including commercial vehicles and other business are forecasted to reach RMB80 billion (1,020.8 billion yen, US$9.6 billion), doubling 2003 performance levels. Operating profits (including commercial vehicles and other business) are expected to reach RMB8 billion (102.08 billion yen, US$1 billion), or 10% of forecasted sales.
About Dongfeng Motor Co. Ltd (DFL)
Dongfeng Motor Co., Ltd. (DFL), was established as a result of a comprehensive, strategic partnership between Dongfeng and Nissan. Registered capital of the new company is RMB16.7 billion (approximately 213 billion yen, US$2 billion), with Dongfeng and Nissan each holding 50% of equity. Dongfeng is making a series of capital contributions in the form of existing assets and, corresponding with Dongfeng's contributions, Nissan is making its capital contribution in cash. The new company inherited Dongfeng's key existing automotive businesses and operations, including trucks, buses, light commercial vehicles and passenger vehicles.
Note: Amounts in RMB are translated for the convenience of the reader only at the rate of 1 RMB per 12.76 Japanese yen and 1 RMB per 0.12 U.S. dollar, based on the exchange rates in effect as of April 13, 2004.