Dongfeng-Yulon joint venture approved by regulators

Dongfeng Motor Corp., one of major automakers in Mainland China, and its Taiwanese partner Yulon Motor Co., Ltd. just gained the approval from Chinese regulators for their joint venture Dongfeng Yulon Motor Co., Ltd. (transliterated).

The venture, with registered capital of CNY 1.55 billion and a total investment of CNY 3.4 billion, will make the Luxgen, a branded created the its Taiwanese parent, in Hanghzou, capital of Zhejiang Province, southeast China.

Its first-phase project is designed to have a production capacity of 240,000 vehicles on an area of about 75 hectares. A capacity of 120,000 vehicles and 200,000 engines will be put into use at first, in addition to its auto R&D center.

In September 2009, the main body of the project's engine workshops was completed, and the other five workshops broke earth. Ten parts companies under the wing of Yulon Motor settled down in Hangzhou a month ago.

In the initial operation, the venture will make three proprietary brands, including a SUV model, a MPV model, and a sedan model. An electric vehicle (EV) is found on its products plan. The Luxgen7 MPV, released by the Taiwanese parent in August 2009, will also be made in Hangzhou.

Notably, Dongfeng Motor just released its goal for 2010, when its sales volume will reach 1.6 million to 1.8 million, market share 15 percent, and sales profit margin 4.5 percent.

In 2010, the automaker aims to sell 1.35 million passenger cars. The sales volume of its proprietary products will rise to 700,000, and account for more than 50 percent of its total. Its subsidiary Dong Feng Motor Corporation Passenger Vehicle Company will strive to become an automaker with international fame within 20 years.

Dongfeng Honda Automobile Co. Ltd., another joint venture of Dongfeng Motor, plans to build the second plant in China. If everything goes well, the plant will break ground in March 2010, with the green light of the National Development and Reform Commission (NDRC), China's macro-economy regulator.

The Dunkou Development Area, Wuhan City, Hubei Province, central China, has examined and approved the land used for Dongfeng Honda's second factory. It is designed to turn out 240,000 complete cars per year.

Earlier, the venture has created its sole factory in Wuhan, whose maximum production capacity can be enlarged to 260,000 to 280,000 from 240,000.

From January to October 2009, it aggregately sold 169,000 vehicles, surpassing the 2008 total two months ahead of scheme and keeping a 23% growth.