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CARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLECARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLECARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLECARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLE
DONGFENG MOTOR GROUP CO.,LTD
Nov. 22, 2006Wuhan
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Table of Contents Table of Contents
Brief Overview of DFGBrief Overview of DFG
Brief Overview of DPCABrief Overview of DPCA
Brief Overview of DHACBrief Overview of DHAC
Current Operation Situation of DFGCurrent Operation Situation of DFG
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Group StructureGroup Structure
Dongfeng Motor Group( the Company )
Subsidiaries Sino-foreign JVsOther companies in which
the Company has directequity interests
Dongfeng(Shiyan) Special Purpose
Commercial Vehicle Co.,
China Dongfeng MotorIndustry Import&Export
Co., Ltd
Dongfeng Motor Tender Info. Co., Ltd
Dongfeng Motor Co.,Dongfeng Honda
Engine
Dongfeng HondaDongfeng Honda
Auto Parts
Dongfeng Nissan Diesel
Dongfeng MotorFinance Co., Ltd
Dongfeng SUV Co., Ltd
Dongfeng ElectricalMotor Joint Stock
Dongfeng PeugeotCitroen Co., Ltd
Honda Auto(China) Co., Ltd
50% 50%
50%
44%
Dongfeng Motor Corporation
Public Shareholders
66.68%
33.32%
96%
95%
35.2%
50%
50%
20%
10%
40%
36.44%
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Production Capacity
Unit: 0,000
Product Line
Major JVs Foreign Partner
Dongfeng Peugeot Citroen
PV : 22
Dongfeng Honda Automobile
PV : 12
Dongfeng Honda Engine
Engine :32
Dongfeng Motor Co. Ltd
CV :PV :
3228.5
(1)
1 ) Nissan Diesel included
Brief Overview of DFGBrief Overview of DFG
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Xinjiang Auto
Liuzhou Auto
Shanghai
Hangzhou
Dongfeng Honda Auto Parts
Shiyan BaseXiangfan Base
Wuhan Base
Guangzhou Base
Layout of Major Production Facility
Four Major Production Facilities
Shiyan Base: CV, Auto Parts , Auto Manufacturing Equipments
Wuhan Base: Headquarter, PV
Xiangfan Base: LCV, Engines, PV
Guangzhou Base: PV, Engines, Auto Parts and Components
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Brief Overview of DPCABrief Overview of DPCA
DPCA was first established on May 18th, 1992. Construction established in
two major stages based on an overall planning
First stage investment: RMB13.1bl. Annual production capacity of 150,000
units sedans and 200,000 units engines was formed in the stage
Investment budget for second stage construction is RMB 5bl, forming
annual capacity of 300,000 sedans and 400,000 units of engines
In January 2004, second stage construction for 300,000 units production In January 2004, second stage construction for 300,000 units production
capacity expansion project broke ground.capacity expansion project broke ground.
On Oct. 27, 2006, construction for DPCA Second Plant started.
Company staff number: 9,000. Company structure: 9 departments, 2 plants,
2 Brand Commercial Departments.Technical engineers: 700 with an average
age of 35. 83.5% are college graduates.
Dual-brand strategy
Course of Development
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Brief Overview of DPCABrief Overview of DPCA
Dual brands and a broad product line
Advanced technology
Strong R&D capability
Fine product quality
Leading-edge technology and safety
Platform-sharing strategy
1 ) Products technology keep pace with PSA level. Joint development of products which are more adaptable to local market
2 ) Wider coverage of product line – N platform, No.2 platform, No.1 platform
3 ) Designed shared auto parts rate exceeding 60% - largely reduced manufacturing cost
Company advantages
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Brief Overview of DPCABrief Overview of DPCA
2005 production:141,6612005 Sales: 140,399
YoY growth: 60.92% and 57.52%
Operation Performance
114040 165453 141661206762
0
50000
100000
150000
200000
250000
2005年1-10月 2006年1-10月 2005年 2006年预测
83670
32984
96233
64342
100011
40388
125000
83015
0
50000
100000
150000
200000
250000
2005年1-10月 2006年1-10月 2005年 2006年预测
DCAD DPAD
3.79%4.39% 4.83% 4.95%
0%
2%
4%
6%
8%
2004年 2005年 2006年1-9月 2006年预测
Operation situation from 95-2002
Operation situation from 95-2002
Operation situation from January – October 2006Operation situation from January – October 2006
Sales from January – October 2006Sales from January – October 2006Market shareMarket share
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Brief Overview of Dongfeng Honda Automobile Co., Ltd
Brief Overview of Dongfeng Honda Automobile Co., Ltd
Time of Establishment : July 16th, 2003
Equity Stake : DFM :HM :HMCI ( 50%:40%:10%)
Registered Capital : 200 mn USD
Production Capacity : 120,000 units/year
Current Models : CR- V CIVIC
Staff number : 2526 persons ( by the end of September 2006 ) Time of Production : February 2004
Land Area : 690,478 ㎡ Corporate Culture : Continuously expand business scale and strive to achieve business
target Strive to improve customer satisfaction Further improve corporate governance and closely cooperate for
mutual development
Course of Development
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Brief Overview of Dongfeng Honda Automobile Co., Ltd
Brief Overview of Dongfeng Honda Automobile Co., Ltd
1st stage construction
2nd stage costruction +
CR-V: launched in May 2004, two time winner of CCTV Annual SUV Taking leading position in PRC high-end SUV market ever
since its launch
Civic: Launched in April 2006, the first sedan introduced by
DHAC. Well acclaimed by the market for its superb power
and fuel efficiency.
CRV
CRV CIVIC
Products Briefing
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Brief Overview of Dongfeng Honda Automobile Co., Ltd
Brief Overview of Dongfeng Honda Automobile Co., Ltd
11,931
25,645
51,887
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
55000
60000
2004年 2005年 2006 1-10月
53.48%53.48%
Operation performance
Production volume
Production volume Sales revenuerSales revenuer
47071
10,472 26,2445,000
20,000
35,000
50,000
2004年 2005年 06 1-10年月
Sales volume
Sales volume
150.6%150.6%
43.6%
649,949
494,999
203,212
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2004年 2005年 2006 1-10年 月
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Current operation for DFGCurrent operation for DFG
Aggregate sales: 595,000 units
PV: 385,000 units , YoY growth34.78%
High than industry average:31.68%
Several newly launched models, including new Dongfeng Nissan Teana, Dongfeng Peugeot 206, Dongfeng Citroen C-Triomphe and Dongfeng Honda Civic were well received by the market and the recently launched Nissan Sylphy also became a new growth driver for the Group.
In IH2006 sales volume broke through 100,000 units, recording a YoY increase of 38% and a
profit of RMB190 ml, operational level remarkably improved
Sales revenue YoY growth 9.8%
Net profit YoY growth 68.75%
Gross profit YoY growth 47.65%
ROE YoY growth 7.2%
Remarkable market performance Remarkable market performance PV growth higher than industry PV growth higher than industry average in first 10 monthsaverage in first 10 months
Improved financial performance Improved financial performance 1-6 20061-6 2006
TTurning Around of DPCA, with urning Around of DPCA, with Remarkably Improved OperationRemarkably Improved Operation
Major performance in first 19 months
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384782
285486
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2005,1-10 2006,1-10
Sales of PV-Sales of PV- Dongfeng Honda AutomobileDongfeng Honda Automobile
Sales of PV- Dongfeng Sales of PV- Dongfeng Peugeot CitroënPeugeot Citroën
Sales of PVSales of PV - - Dongfeng Motor Co. LtdDongfeng Motor Co. Ltd Total sales of PV - Dongfeng Motor GroupTotal sales of PV - Dongfeng Motor Group
20,839
0
15,000
30,000
2005,1-10 2006,1-10
Source: Forcast of China Association of Automobile Manufactures (CAAM)
Each JV strategically launched competitive new models directed at each sub-segment, Each JV strategically launched competitive new models directed at each sub-segment, which fastly pushed forward the Group’s PV industry.which fastly pushed forward the Group’s PV industry.
Well Positioned PV Business Entered a Fast Development Stage
Well Positioned PV Business Entered a Fast Development Stage
147,993
050,000
100,000150,000
2005,1-10 2006,1-10
Growth rate:
19.7%
Growth rate:
125%
Unit:,000
Unit:,000
116,654160,575
0
100,000
200,000
2005,1-10 2006,1-10
Growth rate:
37.65%
Unit: ,000
PSA Peugeot Citroën
Growth rate:
34.75%
,ooo unitsIndustry YoY growth rate :34.75%
47,071
177,136
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Steady Revenue GrowthSteady Revenue Growth
SSales Revenueales Revenue
23,282
21,192
20,000
20,500
21,000
21,500
22,000
22,500
23,000
23,500
1H2005 1H2006
9.9%
RMB million
Composition of RevenueComposition of Revenue
35%28%
61% 70%
4% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1H2005 1H2006
CV PV Others
Rapid sales growth as well as a steady pricing policy guaranteed a continuous and Rapid sales growth as well as a steady pricing policy guaranteed a continuous and steady growth of the Group’s sales revenuesteady growth of the Group’s sales revenue
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Continuous Growth of Gross Profit Continuous Growth of Gross Profit
2,7663,330
4,084
13.1%
16.2%17.5%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2005 1H 2005 2H 2006 1H
0%
4%
8%
12%
16%
20%
Gross profit Gross profit margin
DDFG’s Overall Gross Profit and Gross Profit MarginFG’s Overall Gross Profit and Gross Profit Margin
14.0% 10.3% 13.0%
0.0%10.0%20.0%
2005 1H 2005 2H 2006 1H
12.9% 18.2% 19.6%
0.0%10.0%20.0%
2005 1H 2005 2H 2006 1H
CV Gross Profit MarginCV Gross Profit Margin
PV Gross Profit MarginPV Gross Profit Margin
RMB million
Significant growth of the Group’s PV gross profit and gross profit margin guarantees the Significant growth of the Group’s PV gross profit and gross profit margin guarantees the steady increase of the Group’s gross profit marginsteady increase of the Group’s gross profit margin
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Robust Profit GrowthRobust Profit Growth
660
940
1,114
0
300
600
900
1,200
1,500
Net Profit
DDFG’s Total Net ProfitFG’s Total Net ProfitSales GrowthSales Growth
RMB Million
Fast growth of PV sales volume and steady pricing policy guaranteed a continuously Fast growth of PV sales volume and steady pricing policy guaranteed a continuously steady growth of the Group’s sales revenuesteady growth of the Group’s sales revenue
164 187233
141 103
125
0
50
100
150
200
250
300
350
2005 1H 2005 2H 2006 1H
PV CV
000’ units
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Continuous Improvement of Operational Efficiency
Continuous Improvement of Operational Efficiency
16.72%
15.18%15.40%
14.00%14.50%
15.00%15.50%16.00%
16.50%17.00%
2005 1H 2005 2H 2006 1H
Improvement of operation efficiency led to steady growth of the Group’s ROA and ROEImprovement of operation efficiency led to steady growth of the Group’s ROA and ROE
NNet Profit Marginet Profit Margin Return on EquityReturn on Equity
4.80%
3.10%
4.60%
0.00%1.00%
2.00%3.00%4.00%
5.00%6.00%
2005 1H 2005 2H 2006 1H
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Prospect of PRC Auto Industry in 2H 2006
Prospect of PRC Auto Industry in 2H 2006
At the beginning of 2006, estimated annual sales growth of China’s automobile industry by CAAMAt the beginning of 2006, estimated annual sales growth of China’s automobile industry by CAAM was 13% , 13% ,
13%
000’ units
Source: Forcast of China Association of Automobile Manufactures (CAAM)
6,500
5,758
5,200
5,400
5,600
5,800
6,000
6,200
6,400
6,600
2005A 2006E
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2. Outlook of DFG 2. Outlook of DFG
SSpecific Measurespecific Measures
000 ’units
Passenger Vehicles : In the 2H, Dongfeng Nissan Sylphy, Geniss
and Dongfeng Citroen T21 successively launched to the market.
Further improve localization rate and reduce cost through advancement of technology, management and central procurement, so as to improve competitive edge of our products in the market.
Commercial Vehicles : Strengthen marketing of newly launched
products Safeguard competitiveness of old products Promote export and expand overseas market
share
SSales Planningales Planning
230200
70
250
0
50
100
150
200
250
300
DFL-PV DPCA DHAC CV
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Thanks!