Dongfeng Honda will take over Shenlong's second factory

Shanghai (Gasgoo)- It’s reported that Shenlong’s second factory, known as “PSA Group Global Sample Factory”, will accomplish its transfer procedure recently. Dongfeng Honda may be the factory’s new owner.

But details show that whether the transfer will be fulfilled by renting or buying still waits to be confirmed. But one insider revealed that Shenlong’s first factory will undergo a large upgrade, which will introduce the production line for models previously produced by its second factory. Therefore, chances are that Dongfeng Honda will buy the factory directly.

Shenlong’s second factory has an annual capacity exceeding 150,000 units,  mainly producing middle-and-high-end models including C5, C6 and 508. In the meantime, it is also the global model factory for PSA Group. But latest data shows that Shenlong factory only sells 248,000 units till October 8th, still lagging far behind its annual sales target of 700,000 units. In sharp contrast, Dongfeng Honda has a total sales volume of 517,000 units in the previous three quarters with a year-on-year growth of 27.3%.

In fact, as early as the beginning of this year, Shenlong transferred nearly 1,000 employees to support Dongfeng Honda’s production for one-year period. Dongfeng Honda also speeds its negotiation progress with the construction stagnation of the third factory.

Dongfeng Honda’s third factory started construction in Wuhan on December 8th last year, and is expected to be put into production in the first half of 2019 with an initial annual capacity of 120,000 units and a total investment of RMB 3b.