Dongfeng receives 120m yuan government grant

Gasgoo.com (Shanghai January 25) - Dongfeng Motor confirmed yesterday evening that it received a 120 million yuan ($19.12m) subsidy from the government, Securities Daily reported today. According to its third quarter performance review, Dongfeng required the subsidy due to falling automobiles sales of their joint venture partnerships with Nissan and other Japanese manufacturers.

The Zhengzhou Nissan joint venture is one of Dongfeng's primary sources of income. In 2011, Dongfeng Motor earned 464 million yuan ($73.94m) in net profit, with subsidiary Zhengzhou Nissan earning over 236 million yuan ($37.61m). Like other Sino-Japanese JVs, Zhengzhou Nissan's sales were hindered by the Diaoyu Island incident, which instigated a wave of anti-Japanese protests throughout the country.

Dongfeng's net profit for the first three quarters of 2012 totaled 18.18 million yuan ($2.89m), 290 million yuan ($46.21m) less than it was the previous year. According to statistics from the China Association of Automobile Manufacturers, Dongfeng sold a total of 3.07 million vehicles last year, only 0.65 percent more than the 3.06 million it sold in 2011. Sales of its JVs–Zhengzhou Nissan, Dongfeng Nissan and Dongfeng Honda–all fell far below initial expectations.