What Does "Dongfeng South Blowing" Bring to the Automotive Industry

On April 16, Dongfeng signed a strategic framework agreement with the Fujian Provincial Government. Dongfeng held a 45% stake in Fuqi by way of capital increase and formed a holding company with Fuqi. The holding company owns 50% of Southeast Auto. When the new Fuzhou Automobile Industry reaches 300,000 vehicles, Dongfeng will further inject capital, with the ratio of shares to 60%. The long-rumored Dongfeng reorganization of Fuqi has finally become a reality.

In 2003, Dongfeng established Dongfeng Nissan in Huadu, Guangzhou, and Dongfeng first went south. In 2013, Dongfeng participated in the blessing of Fuqi Gas, and the second-to-next east winds must not only participate in the stock exchange. After the restructuring of Fuqi, Dongfeng expanded its position in the south. From the perspective of structure, landing in Fujian will also provide Dongfeng with more freedom than Guangzhou. From the central region to the coastal areas, Fujian will be a very good exporter for the east wind that has clearly proposed to accelerate the expansion of overseas business.

Dongfeng said that the signing of the contract will further optimize Dongfeng’s business distribution in the southeastern coastal areas, improve Dongfeng passenger vehicles, commercial vehicles, powertrains, key auto parts and components, and automotive level businesses, and promote the development of Fuqi Group.

Fujian Automobile Group currently owns Southeast Auto's own brands, Southeast Mitsubishi, Jinlong Auto Group, Fujian Benz and New Longma Automobile. On the day of the signing ceremony on the 16th, Liu Weidong, deputy general manager of Dongfeng Motor Co., stated: “Dongfeng and Fuqi will cooperate on two levels, including holding shares at the Fuqi Group level and adjusting the equity level of Fuzhou Automobile's Southeast Automotive. "Southeast Motor has become the first project to be involved after Dongfeng Motor Co., Ltd. shares shares in Fuzhou.

Southeast Motor sold 79,100 vehicles in 2012, a year-on-year increase of 6.63% over the 72,200 units sold in 2011. The former shareholder structure of Southeast Automotive is 50% owned by Fugas, 25% owned by Mitsubishi Motors and Taiwan China, and Mitsubishi has provided technical vehicle support to Southeast Automotive for many years. The specific operation and management are mainly from Fuqi and Taiwan-China Fuzhou. The two shareholders are responsible. After the Dongfeng shares in Fuqi, the ownership relationship of Southeast Auto has become intriguing. Taiwan China Motors is a wholly-owned subsidiary of Taiwan Yulon Motors, and Yulon Group has had friendship with Dongfeng Group for many years. Dongfeng Yulon Automobile Co., Ltd., which was established at the end of 2010, has further narrowed the relationship between the two. With Dongfeng Participation in FuFu Gas and Shareholders in South Automotive, Yulon Group's further integration of its resources in the mainland has also become possible.

After the equity participation, Fudong Auto's own-brand sedan cars and the newly launched Xinlongma mini-vehicle project will be incorporated into Dongfeng's “Grand Autonomy Strategy”. Dongfang Auto's self-owned brand sedan will be included in Dongfeng's own-brand sedan, and the new Ryoma mini-vehicle will jointly expand Dongfeng's micro-vehicle area with Dongfeng Xiaokang.

In addition to its own-brand sedan and mini-vehicle business, Fudan’s Jinlong Bus and Fujian’s Mercedes-Benz’s high-end passenger car market are currently lacking in Dongfeng. Dongfeng has a strong position in the commercial vehicle sector. Whether the future of the passenger car market is still unknown, but the presence of the Jinlong Bus will certainly provide Dongfeng with a possibility to further expand its business segment.

The top three of the traditional luxury cars are currently not compatible with Dongfeng. The high-end passenger car market where Fujian Benz is located naturally appeals to the attraction of Dongfeng. When the cooperation between Audi and FAW was full, Beijing Benz was not able to sway up in the tangled state. Instead, it made Mercedes gradually become less competitive in the competition of the three major German luxury brands. The combination of Mercedes-Benz and Dongfeng will provide a more powerful partner to Mercedes-Benz and will provide Dongfeng with a huge profit growth point. With such a win-win situation, will the Dongfeng not be excited? Does Mercedes do not think?

Finally, there is another problem from Southeast Mitsubishi. The Southeast Mitsubishi, which has been deteriorating for many years, has seen the Mitsubishi brand decline all the time, and the establishment of the Guangzhou Mitsubishi Motor Corporation has basically announced the shift of Mitsubishi Motors’ China business. After Mitsubishi SUV models were dismissed, Mitsubishi's years of unchanging sedan front for the Dongfeng Nissan, Dongfeng Honda's Dongfeng, I am afraid there is not much attraction.