Dongfeng Motor in Talks with AviChina

Dongfeng Motor Corp. now is still in talks with AviChina Industry & Technology Co., Ltd.   in a bid to buy into Hafei Automobile Group, an important provider of vehicles and auto engines located in northeastern China's Harbin.

If successful, the deal will enable Dongfeng Motor to drive up its position among domestic auto manufacturers and seek essential growths in its global planning. Currently, no specific report on the cooperation has been available yet.

It is urgent for the company to strive for a business breakthrough due to its comparatively weak strength in the proprietary passenger car segment and the increasing competition from rivals, said an insider from Dongfeng Motor.

Dongfeng Motor set up its passenger car department in Wuhan, capital city of central China's Hubei Province, on July 25 after three-year preparation, gearing up the establishment of its independent-branded car models.

As an important automaker in China, the company has not had its own independent-branded car models although it has set up joint ventures for the manufacturing of passenger cars with overseas partners, such as Nissan Motor Co., Ltd., Honda Motor Co., Ltd., and Kia Motors Corporation.

Originally established in 1969, the company moved its operating center from Shiyan to Wuhan on September 28, 2003. Its total assets had amounted to CNY 76.89 billion and net assets had reached CNY 33.9 billion as of the end of 2004.

By now, it has owned production facilities in Shiyan, Xiangfan, ane Wuhan in central China, and Guangzhou in Southern China.

Dongfeng Motor made and sold 932,000 vehicles in 2006 and aims to meet a target of 1 million units in 2007.

Dongfeng Nissan Passenger Vehicle Co., jointly formed by Dongfeng Motor and Japan's Nissan Motor Co., Ltd., aims to sell 300,000 passenger cars in 2007 and will play a more important role in the Chinese automotive market in the coming three years.

The venture sold 128,168 vehicles in the first half of this year, surging 59 percent year on year. The figure has successfully catapulted the automaker onto the 6th position nationwide from earlier ninth for 2006.

Dongfeng Peugeot Citroen Automobile Co., Ltd. (DPCA), Dongfeng Motor's another joint venture, plans to obtain a year- on-year 30 percent growth in its auto production and sales, and reduce cost by CNY 1 billion in 2007.

Sales of Dongfeng Nissan and DPCA in the first ten months of this year respectively reached 207,531 units and 167,441 units, according to statistics.

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