Dongfeng Automobile to plow RMB594 million in NEV supply chain fund

Shanghai (Gasgoo)- Dongfeng Automobile Co., Ltd. (DFAC), a subsidiary of Dongfeng Motor Group, plans to jointly set up an industrial fund focusing on new energy vehicle supply chain with Beijing Ruihe Xinye Investment Co., Ltd. (R&H) and the state-owned Hanjiang Investment Holding, the automaker announced on June 22.

The fund, whose full name is Xiangyang Dongfeng Hanjiang New Energy Vehicle Supply Chain Fund Partnership Enterprise (hereinafter referred to as Dongfeng Hanjiang Fund), will involve in a total investment of RMB1.2 billion, of which the respective capital subscribed by Hanjiang Investment and DFAC is RMB594 million and RMB594 million.

Focusing on the NEV industry, Dongfeng Hanjiang Fund will principally support the automaker's NEV operational program in terms of the automobile marketing terminal, according to the announcement.

The automaker has by far owned three new energy passenger vehicle models—the Junfeng E11K, the Junfeng ER30 and the Junfeng E17. In a bid to boost its NEV sales, DFAC has established a subsidiary dubbed “Dongfeng New Energy Vehicle Project Company” which purchases NEVs from the carmaker and rent them to other companies.

DFAC said setting up the fund, which is to respond to the government's call for energy conservation, emission reduction and greener travelling, would improve the company's cash flow and decrease its receivables. As China is phasing out the NEV subsidies and has scrapped the “white list” of recommended battery suppliers, EV makers are struggling to meet sales target amid increasingly strict emission standards.