Dongfeng Motor joins hands with auto parts giant Dana.Co.

Yesterday, one of the world's largest auto parts company Dana announced that the Group will invest a subsidiary of Dongfeng Automobile Co. Ltd. to set up Dongfeng Dana Axle Co. Dana will invest over 55 million U.S. dollars to acquire 50% of the equity of the joint venture.

Dongfeng Dana headquarters is located in Xiangfan, Hubei Province. Dongfeng Motor Co. Ltd. spokesman said that as early as in 2005, Dana and Dongfeng signed a draft agreement on the establishment of the joint venture. However, it is interrupted by Dana insolvency proceedings in the North American market. The two sides revised the agreement that Dana will pay 38.8 million Yuan (about five million U.S. dollars) to get 4% of Dongfeng's shares. This transaction is expected to be completed by the end of March 2007. In addition, the agreement also stipulates that by April 1, 2008, Dana will purchase the remaining 46% of Dongfeng shares, which means the 50:50 equal shareholdings of the two companies.

Dana is a powertrain, chassis, car body and engine technology supplier. Company CEO Nick Stanage noted: "Dongfeng Dana aims at becoming Asia's largest commercial vehicle axle supplier. For the company's commercial vehicle sector, this joint venture will balance the North American sector." Dongfeng Commercial Vehicle Company is the largest commercial vehicle company in China, which was co-invested 16.7 billion Yuan by Dongfeng and Nissan Motors in 2003.