HONG KONG: Dongfeng Motor Group Co Ltd, the mainland's third largest car manufacturer, saw its turnover surge to 41.7 billion yuan (US$5.2 billion) in 2005, an increase of 27.5 per cent year- on-year.

The Hubei-based company reported that its sales volume amounted to 595,000 units in 2005, 40.7 per cent up from the previous year.

Its market share in the mainland's car market increased from 8.3 per cent in 2004 to 10.3 per cent in 2005.

The company saw its sales of passenger vehicles amount to 351,219 units in 2005, shooting up by 98.5 per cent from the previous year.

Sales of passenger vehicles produced by its three joint ventures - Dongfeng Nissan, Dongfeng Peugeot Citroen and Dongfeng Honda - grew by 139 per cent, 58 per cent and 151 per cent respectively in 2005.

Dongfeng Motor's net profit also soared by 21.3 per cent to reach 1.6 billion yuan (US$200 million) in 2005, exceeding its own forecast of not less than 1.5 billion yuan (US$187.5 billion) announced when it launched its public offering in Hong Kong at the end of 2005.

Xu Ping, chairman of Dongfeng Motor, felt satisfied with the company's results in 2005, describing them as "inspiring ones" that marked a good beginning. The achievements came despite overcapacity and price wars.

The company is expected to launch at least 10 types of passenger vehicles by 2008, with two to three new models annually introduced by Dongfeng Peugeot Citroen and Dongfeng Nissan, and one to two new models from Dongfeng Honda Automobile every year.

Donfeng Motor will remain keen on developing commercial vehicles such as heavy and light vehicles.

As the largest maker of heavy vehicles and with the second-largest market share for light vehicles on the mainland, Dongfeng Motor is about to introduce a series of new commercial vehicles.

"We will further strengthen our heavy and light vehicle segments in the next three years by introducing more new models into the local market," Hu Xindong, a managing director of the company told China Daily.

Hu said to sustain the company's expansion, Dongfeng's capital expenditure for 2006, 2007 and 2008 would amount to a total of 20 billion yuan (US$2.5 billion).

As for development in 2006, Xu expected his company's growth rate to be quicker than the average growth rate of China's car market.

Xu indicated that there would be no big price cuts in 2006 and that a weakening steel price would help the company to further extend its profit margin.

Source: China Daily