Dongfeng Motor

1969 to 2000

Known as Second Automobile Works (第二汽车制造厂) until 1992, Dongfeng, or "East Wind" in Chinese, was founded in 1969. Its origins lie in a dictate of Chairman Mao Zedong; as part of his "Third Front" strategy, its far inland location in Hubei Province was meant to protect it from foreign invasion. Traditionally manufacturing commercial vehicles, by 2001 these made up about 73% of Dongfeng's production. By 2012, that figure had reversed, and 73% of manufactures were passenger cars. However, the percentage of consumer offerings was likely lower as passenger car counts may include microvans, tiny commercial vehicles that are popular in China.

Between 1978-1985 alongside the market-based Chinese economic reforms instituted by Deng Xiaoping, Dongfeng was transformed from a manufacturer of two heavy-duty trucks with fragmented operations and ownership into a single, centrally managed enterprise. This process included placing all Dongfeng operations—from part manufacture to vehicle assembly—under the control of a single business entity and the merger of six truck production bases as well as a number of other companies previously controlled by provincial governments. Post-1985, further reforms took place that allowed Dongfeng greater autonomy; the company was removed from the direct administrative control of the central government.

By the mid-1980s, its assets had tripled from those initially given to it by the state in 1981, and management was desirous of even greater production capacity. But in 1995, the company was experiencing financial difficulties as was the case with many Chinese automobile manufacturers at this time. The situation was still dire in 1998 precipitating a 1999 restructuring of the company.

This state owned enterprise has come into conflict with authority at both the national and provincial levels. Alongside First Automobile Works it saw the successful dismantling of the Automobile Corporation, a central government entity presumably tasked with preventing non-competitive business practices through dictating output volumes and curtailing purchasing, as well as exasperation at the right of the State to make managerial appointments.

The Chinese partner in many Sino-foreign joint venture companies, Dongfeng initiated most of these cooperative efforts with foreign firms in the early 2000s. But its first was established in 1992 with French PSA Group. Known as Dongfeng Citroën Automobile Company (DCAC), it was the forerunner to the current Dongfeng Peugeot-Citroën Automobile Limited (DPCA).

2000 to 2010

By 2003, Dongfeng had established joint ventures with Kia Motors (Dongfeng Yueda Kia Automobile Company, 2002), Honda (Dongfeng Honda Automobile, 2003), and Nissan (Dongfeng Motor Company, 2003). As of 2011, it had more Sino-foreign joint ventures than any other Chinese automaker, and the 2013 creation of a partnership with French Renault means it retains this title today.

In 2009, it sold 1.9 million vehicles ranking second among domestic automakers and third overall.

2010 to present

At the 2010 Beijing Auto Show, Dongfeng displayed an electric vehicle concept car, a physical representation of its vow to bring an electric car to market by 2015. China subsidises oil, an incentive for the State to spur alternative energy vehicle development, and Chinese automakers see opportunities in less mature electric vehicles because Western companies have yet to develop much of a lead in the technology.

In 2010, the company sold 2.72 million units, making it the second most-productive Chinese vehicle-maker. It reported 1.72 million sales of passenger vehicles that same year.

2011 production figures put the company in second place, in terms of production volume, in its home market; Dongfeng produced 3.06 million vehicles that year.

It was the second-largest Chinese automaker in 2012 by production volume, and Dongfeng manufactured over 2.76 million whole vehicles that year with passenger cars comprising 73% of manufacture. The number of cars counted as passenger vehicles may conflate consumer offerings and tiny commercial trucks and vans known as microvans, however.

Dongfeng established its first research and development facility outside of China in October 2012 when it acquired a 70 percent stake in the Swedish engineering company T Engineering AB.

In January 2013, Dongfeng and the Sweden-based Volvo agreed to form a China-based medium- and heavy-duty truck manufacturing joint venture called Dongfeng Commercial Vehicles, to be owned 55% by Dongfeng Motor and 45% by Volvo. As part of the transaction, Volvo will pay 5.6 billion yuan (US$900 million) to Dongfeng, Dongfeng will contribute the bulk of its China-based medium- and heavy-duty truck manufacturing activities to the venture, and Dongfeng will buy out Nissan Motors from its existing joint venture in medium- and heavy-duty trucks with the Japanese company.

In December 2013 Dongfeng and the French automaker Renault agreed to form a 50:50 joint venture, Dongfeng Renault Automotive Co Ltd., to manufacture Renault brand passenger cars for the Chinese market. The two partners agreed to invest an initial 7.76 billion yuan (US$1.27 billion) in the venture, which became Dongfeng's sixth joint venture with a foreign automaker, the most of any Chinese automaker.

In February 2014, loss making PSA Peugeot Citroën, a joint venture partner of Dongfeng since 1992, was recapitalized, with Dongfeng taking a 14% stake.

Products

Dongfeng sells vehicles under the following brand names:

Dongfeng

Fengshen

Fengshen

2009 saw the release of an own-branded sedan, the Fengshen S30. Dongfeng-made passenger vehicles were, until the S30, all made by Chinese-foreign joint ventures and carried foreign brand names. These JVs continue to produce the great majority of its passenger products as of 2010.

Own-brand models include a hatchback as well, the Fengshen H30.

Joint ventures

Dongfeng is the Chinese partner in many joint ventures that make trucks and cars.

Cummins

A subsidiary of Dongfeng subsidiary Dongfeng Automobile Co Ltd, Dongfeng Cummins Engine Co Ltd is a joint venture with American engine-maker Cummins that was established in 1995 and manufactures truck engines, etc.

Dana

Dongfeng established its joint venture with American parts-maker Dana Holding Corporation, Dongfeng Dana Axle Co, c. 2005. As of 2011, Dana and Dongfeng both have 50% ownership of this joint venture.

Dongfeng Honda

Based in Wuhan, Hubei province, Dongfeng Honda Automobile Company was established in 2003 and manufactures Honda-branded SUVs and automobiles for the Chinese market. Products produced by this joint venture with Honda include the Honda Civic, the CR-V and the Spirior. As of early 2011, some offerings may incorporate Japanese-made parts. Dongfeng also owns 10% of Honda's auto plant dedicated for export in Guangdong Province, Honda Automobile (China) Company.

In 2010, its model line included what was China's best-selling SUV that year, the CR-V. Other Honda-branded models sold in China are made by Guangqi Honda Automobile (of the Guangzhou Automobile Group), but in 2004 Honda made an agreement that allowed it to sell Dongfeng-built CR-Vs through Guangzhou's showrooms.

Dongfeng Nissan

Nissan and Dongfeng have a long-standing relationship. Early on, the Chinese company produced diesel-powered Nissan trucks built from complete knock-down kits, and Nissan lent Dongfeng technical assistance. When the Chinese State began allowing foreign automakers access to its market through joint ventures with Chinese companies, Nissan chose Dongfeng. It remains the only Chinese partner of Nissan although each foreign automaker is allowed two.

Dongfeng Motor Company

Established in 2002, Dongfeng Motor Co Ltd began operating in July 2003. Nissan hold 50% ownership in this maker of heavy trucks, light commercial vehicles, and passenger cars. Heavy-duty trucks and buses exclusively carry the Dongfeng brand name, light-duty trucks use both the Nissan and Dongfeng names, and consumer offerings are Nissan products. While the great majority of passenger cars retain the Nissan name, a small number sell under the brand name Venucia.

A few of its Dongfeng-branded light commercial vehicles have been exported to Afghanistan, Pakistan, Africa, and the Middle East.

Infiniti

Infiniti-branded vehicles are most probably imported as of 2006, but it was reported in 2013 that some production may be moved to China in the future.

Venucia

A Dongfeng/Nissan own brand with cheaper offerings and ties to a famous-name foreign automaker that are attractive to the less-affluent inland city consumer, Venucia (Qi Chen) launched its first models in 2012.

The name is derived from that of the Roman goddess of beauty, Venus.

Other Nissan joint ventures

Other joint ventures include Dongfeng Nissan Passenger Vehicle Co, a unit of Dongfeng Motor Company that makes automobiles for the domestic market and has exported to Egypt. Another unit of Dongfeng Motor Company, Zhengzhou Nissan Automobile Co, manufactures light commercial vehicles. Most Zhengzhou products are sold under the Dongfeng brand, such as the Dongfeng Rich (Rui Qi), a reworked Nissan D22.

Dongfeng Peugeot-Citroën

Dong Feng Peugeot Citroën Automobile Company is a joint venture with PSA Peugeot-Citroën set up in 1992 and based in Wuhan, capital of Hubei province.

Currently selling a range of Peugeot and Citroën models, its first offering was a hatchback built from semi-complete knock-down kits, the ZX Fukang. Its first Peugeot-branded product was introduced in 2004.

Some of the engines made by this joint venture are used in other Dongfeng passenger car products, the Fengshen S30 and H30, for example.

Dongfeng Renault

Created in late 2013, Dongfeng Renault Automotive Co Ltd plans to produce 150,000 whole vehicles per year at an as-yet-unbuilt production base in China. This facility may become operational as early as 2016.

Dongfeng Yueda Kia

A joint venture with the Korean Kia Motors, Dongfeng Yueda Kia Automobile Co is based in Yancheng, Jiangsu province and produces Kia-branded automobiles for the Chinese market.

While Kia car assembly began at a non-Dongfeng affiliated company with the Kia Pride in 1997 at Jiangsu Yueda Auto Works, an equally owned partnership (Yueda Kia Motors) was formed in 1999, and Dongfeng took over half of Jiangsu Yueda's ownership of that in March 2002. Kia has a 50% share while Dongfeng and Jiangsu Yueda Investment Co Ltd (SSE: 600805) each hold 25% ownership.

In 2010, its Sportage was the 8th most-purchased SUV in China.

The company has two production bases in China.

Dongfeng Yulon

An equally owned joint venture with Taiwanese automaker Yulon Motors, Dongfeng Yulon (or Dongfeng Luxgen or Dongfeng Yulong), was set up in 2009 and will manufacture Yulon's Luxgen models in China after the completion of a planned production base in the Hangzhou Xiaoshan Linjiang Industrial Zone in 2011. The cars will be sold in China, and production capacity will initially be 240,000 units/year. 120,000 of these units are vehicles and the other half, engines.

As of late 2010, 35 out of a planned 60 sales outlets have signed on to sell the Taiwanese cars. This JV is Dongfeng's second try at a cooperation with this Taiwanese company.

Dongvo (Hangzhou) Truck Company

Formerly called Dongfeng Nissan-Diesel Company, Dongvo is a joint venture between Volvo's UD Trucks and Dongfeng established in 1996. It has facilities at Hangzhou.

Production bases and facilities

Originating from Hubei province, Dongfeng now has sites throughout China.

Dongfeng sites

Its first production base for passenger vehicle manufacture is in Wuhan, capital of Hubei province, and the second, in the city of Wenzhou, Zhejiang province. Some commercial vehicles are most likely made in the city of Shiyan, Hubei province, as it is the home to a Dongfeng commercial vehicle division.

Joint venture sites

Joint venture sites are located all over China.

Wuhan

Dongfeng has multiple production bases in Wuhan, capital of Hubei province. Two are for its joint ventures with Honda, one of which should see completion in 2012, and another two are for its joint venture with PSA Peugeot Citroën. A third Wuhan base for this latter joint venture is planned.

Xiangfan

Various sites in Xiangfan, Hebei province, produce Cummins truck engines, Thomson International thermostats, disc brakes in cooperation with the Hebei Asbestos Product Mill and the Italian ALA, powertrains for its joint venture with PSA Peugeot Citroën, light commercial vehicles for a joint venture with Nissan, and cars.

Shiyan

A Nissan joint venture engine production base in Shiyan, Hubei province, produces diesel engines, and other sites here produce auto parts.

Zhengzhou

A joint venture with Nissan has a production base, Zhengzhou Light Truck plant, in Zhengzhou, capital of Henan province. In 2010, this was joined by a second, increasing production capacity by 120,000 units/year. Production capacity figures may consider engines and vehicles as discrete.

Guangzhou

A passenger-car production base and technical center in Guangzhou, Guangdong province, is part of both the Nissan joint venture Dongfeng Motor Co and a unit of that joint venture, Dongfeng Nissan Passenger Vehicle Co.

Another Guangzhou production base manufactures Nissan engines. Yet another produces engines for the Dongfeng-Honda joint venture.

A Huadu District, Guangzhou city, Guangdong province, production base is under construction as of late 2010. It will have a 240,000 units/year production capacity, but these may be engines not vehicles. It could be the large-scale vehicle production base currently being built that will expand Dongfeng-nissan local production capacity in this area to 600,000 units/year.

Jiangsu province

Its joint venture with Kia has two production bases the newer located in the Yancheng Economic Development Zone of Jiangsu province.

Shanghai

An R&D center in Shanghai, the China Tech Center, is wholly owned by PSA Peugeot Citroën but lends assistance to Dongfeng's joint venture with this French automaker.

Overseas activities

Dongfeng is involved in a number of ventures in foreign countries, including Indonesia, Malaysia and Myanmar.

Philippines

China Dong Feng Motor Distributors, Inc. Philippines is the sole manufacture/distributor of Dong Feng brand in Philippines. The main business are sales of the Dongfeng series light commercial vehicles, Dongfeng Cummins engines parts, mini-vans, the Special Purpose Vehicle series, pickups, buses, tractor heads and dump trucks.

Vietnam

A Dongfeng company, Dongfeng Liuzhou Motor Co Ltd, sells in Vietnam.

Paraguay

A Dongfeng subsidiary, Zhengzhou Nissan Automobile, in early 2011 signed a deal with AM Reguera, a Paraguayan company that assembles automobiles and makes appliances, for the manufacture of pick-up trucks scheduled to start in 2012 after construction of a production base in Capiatá.

United Kingdom

Small, Dongfeng-branded commercial vans are sold in the UK by importer Vestatec. Sales started in 2011, and the vehicles are sold through dealerships.

Brand efforts and sponsorships

Dongfeng is sponsoring the Chinese entry for the 2014–2015 Volvo Ocean Race, a round-the-world sailing race.

Controversies

Dong Feng produces a range of military vehicles. It exports under the name Dongfeng Aeolus. In August 2005, it was reported that 400 Aeolus military trucks for the Myanmar government had arrived at Shweli in Myanmar, near the border with China. The Norwegian Government Pension Fund Global (GPFG) fund dropped its investments of Dongfeng. As of December 31, 2007, the Government Pension Fund – Global held equities issued by the Chinese company Dongfeng Motor Group Co Ltd. to the value of NOK 32,356,000. The Council on Ethics recommends that Dongfeng Motor Group Ltd. be excluded from the Fund’s investment universe because the company sells military equipment to the government of Burma. In December 2014, the Norwegian Ministry of Finance announced that the exclusion of Dongfeng by the GPFG had been revoked.