China’s Dongfeng Motors battles in crowded market
January 28, 2009 by Matt Brogan
Supported by profits from joint ventures with foreign automakers, Dongfeng Motor Group is moving quickly to build cars under its own brand in a move many consider wasteful given the crowded nature of China’s car market.
With car sales across the country stalled it has been suggested by media there that the brand should focus on its commercial operations (light trucks) and abandon efforts to make its own passenger vehicles.
But Dongfeng is determined to build its own make of cars, even though it already operates passenger vehicle joint ventures with Honda, Nissan, KIA and PSA Peugeot Citroen, the brand plans to launch two cars in the first half of this year, a 2.4-litre mid-sized sport sedan and a 1.6-litre compact hatch (both petrol) – a move that will cost the firm 10 billion yuan ($1.5 billion AUD).
Marketing these cars will however be a challenge for Dongfeng with China already having more than 20 domestic brands as well as strong representation from all the international car makers.
Despite the brand being one of China’s oldest (incorporated in 1969) and enjoying strong and profitable growth from building commercial vehicles it is feared this alone will not necessarily help it sell cars.
Dongfeng has however managed to stay strong in the wake of the economic downturn and still posted profits of 372 million yuan ($54 million AUD) in its commercial vehicle business in the first three quarters of 2008, down by only five percent from a year earlier.
To shore up the domestic economy, the government has unveiled a 4 trillion yuan ($585 billion AUD) stimulus package. The money will be mainly spent on various infrastructure construction projects.
Commercial vehicle sales will therefore likely recover faster than car sales meaning Dongfeng would be wise to invest profits in light trucks and stick to what they know best, but it would seem th lure of making cars is simply too strong.
No tags for this post.
Wow what an original design.
JAMIE WHINCUP IS A LEGEND^^^^
YES, many jobs lost because of very cheap product Made In China being imported and dumped, i DON’T blame the Chinese at all for this.
BUT……the public is to blame totally, THEY are buying it, and not the more expensive and normally better Made In AUS products.
The Chinese are just offereing a lower price point, unfortunatly its what the punters want, and the local stuff suffers.
Just got back from Italy, the Chinese products are NOT accepted, they rather buy Made In Italy or Europe [and pay double/triple], the fact is the Chinese are importing Italian/Euro made goods, they DON’T want there own!!
Cheers
F-0
This is capitalism. Business wants profits. People living in the developed world want cheap products so that they can save some money for alcohol and gambling, or simply survive from the rising living costs. It is native to blame China for job loss while neglecting the fact that many workers have lost their jobs in China at the moment as well. By the way, Do the global financial crisis, which has resulted in so many job losses, and those greedy banking practice and immoderate overspending/consumerism have anything to do with ‘cheap and nasty products’? Some people simply try to bash and discredit Chinese-made products by all means. What a psychological loser!
Live in the real world you people………..when “most” people go shopping they buy products what come from China as most people are tights asses on money so they obviously look for value (bang for buck). Thus they give other countries the wide berth and steer towards cheaper made in China or Korea items. Its only red necks that fluff on with negative comments like why more car companies from China should be around…….its called competition and existing car makers “dont” own the market and shut all others out!
So Dongfeng has a clear right to appeal to the tight asses out there and lift its game to compete against others… if they get there then people will buy them! Racist overtones “dont” apply here………….because they are a huge population they get out there serious and chase buyer interest! My philosophy is let then sink or swim on there own accord as they have every right to sell cars!
That hummer thing looks rad.
Like a H1