Dongfeng Motor Group '09 profit up 58% to $915 mln

Shanghai, April 14 (Gasgoo.com) Dongfeng Motor Group Co. (0489.HK) said today that its profit rose 58% last year to 6.25 billion yuan ($915 million) as vehicle sales were boosted by government incentives, Bloomberg reported.

Dongfeng Motor Group, a Chinese partner of PSA Peugeot-Citroen, Honda Motor and Nissan Motor, boosted sales of vehicles by 44% in 2009 to 1.9 million units, with sales of passenger cars growing 45.6% to 1.05 million. Sales at its joint venture with PSA jumped 52% to 270,006 cars.

"The sales growth of Dongfeng's PSA Peugeot venture, which was previously the weak point for the group, helped beef up Dongfeng's 2009 profit," a Hong Kong-based analyst said. "Dongfeng will continue to grow this year in line with the market expansion."

Dongfeng and Honda have decided to invest 1.15 billion yuan to build a second plant for their joint venture in China as vehicle demand rises in the Chinese auto market. The factory will start production by late 2012, with an initial capacity of 60,000 units.

Last year, China overtook the United States to become the world's largest auto market, with sales rising 46% 13.6 million vehicles, after the government cut sales taxes for small cars and offered subsidies to rural auto buyers.

Dongfeng Motor Group's passenger car sales last month grew 60.94% from a year earlier to 34,100 units and output increased 74.07% to 31,400 units.