china auto market prospect and strategy of dongfeng motor co., ltd
DESCRIPTION
China Auto Market Prospect and Strategy of Dongfeng Motor Co., Ltd. April 19 th , 2005 Dongfeng Motor Company LTD President, Katsumi Nakamura. Contents. 1. What is Dongfeng Motor Co., LTD? 2. China Market : Development and Business Environment 3 . Strategy of Dongfeng Motor Co., LTD. - PowerPoint PPT PresentationTRANSCRIPT
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China Auto Market ProspectChina Auto Market Prospect
and and
Strategy of Dongfeng Motor Co., LtdStrategy of Dongfeng Motor Co., Ltd
April 19th, 2005
Dongfeng Motor Company LTD
President, Katsumi Nakamura
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Contents
1. What is Dongfeng Motor Co., LTD?
2. China Market : Development and Business Environment
3. Strategy of Dongfeng Motor Co., LTD
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Partnership Structure
Dongfeng Automotive IndustryInvestment Co., Ltd.
( Dongfeng holding company )
Dongfeng Automotive IndustryInvestment Co., Ltd.
( Dongfeng holding company )
Core automotiveoperations
Dongfeng Motor Co. LTDDongfeng Motor Co. LTDDongfeng Motor Co. LTDDongfeng Motor Co. LTD
PSA/HondaJVs
Non-auto-motive
companies, etc.
Nissan Motor Co. LTDNissan Motor Co. LTD
Asset investment8.35 billion RMB andcore business transfer
Cash investment8.35 billion RMB
Commercial vehicle division
Passenger car division
Parts division
Equipment division
50% 50%
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Sunny
(Produced by Zhengzhou Nissan)(Produced by Zhengzhou Nissan)Pickup Paladin
One Company, Two Brands
TRUCKS, CV’S & BUSES PASSENGER VEHICLES
Teana
DFLDFLDFLDFL
A single full-line auto company
Bluebird
Tiida
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Contents
1. What is Dongfeng Motor Co., LTD?
2. China Market : Development and Business Environment
3. Strategy of Dongfeng Motor Co., LTD
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China Market Prospect
Continuous mid & long term market expansionContinuous mid & long term market expansion
The toughest competitive marketThe toughest competitive market
Risks on the market growth to be controlled Risks on the market growth to be controlled through the governmental policiesthrough the governmental policies
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Data source : (1) CY96-CY04 : CAAM+CPVIA (2) CY05-CY10 : DFL Study
CY1996-2010 TIV
0
100
200
300
400
500
600
700
800
900
CY96 CY97 CY98 CY99 CY00 CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10
10K units
Actual Forecasting
144183
245
659
846
566
457
343
772 CV
PV
157 160213
525
610
748
38
106 110
47 51 57 69 85140
109 126144
160
203
222
235
254
271
266
300
272
338
276
383 454469
528
294303
319
Remark : Including CBU
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PV Growth Speed : Japan vs. China
Data Source : (1) Japan data : Japan Auto Handbook (2) China data : CAAM & DFL Study
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Japan:CY1964
China:CY1996
CY2010
CY1990
CY2004
CY1973
(10K.Unit)
(Years)
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6 4 2 0 2 4 6
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
(Mil.)
Female
Male
Population of CY1970 : 104.67 Million
Population Structure of Japan (CY1970)
MIL
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10-60
-30
0
30
60
90
120
150
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0% %
19696.20
6.171972
73/945.7
▲ 7.276/3
5.861977
19816.47
5.701983
19877.61 87/9
101.6
▲ 40.196/3
4.931997
20025.18
5.072003
20106.16
03/3
▲ 19.4
Population ratio
Land price increase
<Japan>Population ratio of age 37- 40 &
Land Price Increase in six big citiesSource : Daiwa Institute of Research
(Japan)
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Male Female
100----
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-480 40 0 40 80 (百
万 )
Population Structure of China ( CY2000 )
MIL
Population of CY2000: 1242.6 Million(Not including 2.5 million army man of Liberation Army)
10 years
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< Japan : 11 >
NissanToyotaHondaMazda MitsubishiSuzukiDaihatsuIsuzuSubaruNissan Diesel Hino
China CY2003 over 100
Global 27 brands + α DongfengFaw ShanghaiBeijingGuangzhouTianjinNanjingFujianChanganBrillianceHeavy truck
GeelyCheryHafeiGreat wallZhongxing
< United States : 3 >
GM Ford DCM (C)
< Europe : 10 >
VW ・ Audi PSA. Fiat BMW, DCM (D) Renault, Volvo Styer, Man
< Korea : 3 > Hyundai Kia Daewoo
Number of Auto Enterprise
11
3
10
3
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Source: Fourin ( Japan)
24
33 4560
101
912
15
41
14
17
7
0
20
40
60
80
100
120
1999 2000 2001 2002 2003 2004
Newly introduced models
Existing models
No. of Models in China Market
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Representative models’ weighted ave. price by segment
'03/Q4 '04/Q1 '04/Q2 '04/Q3 '04/Q4
MSRP: K RMB D-segment
250
260.7258.1
251.7249.3 246.8
141.8
90B-segment
94.8
89.6 89.7 88.279.5
-5.3%
145C-segment151.0 152.0
134.2130.4 -13.6%
-16.1%
[Price down rate vs. ’03/Q4]
Market Price Trend
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1 Shanghai VW 100,884 Shanghai VW 62,962
2 FAW-VW 68,945 Beijing Hyundai 56,064
3 Shanghai GM 62,496 FAW-VW 52,799
4 Changan Suzuki 34,763 GZ Honda 42,888
5 Tianjin-FAW 30,988 Tianjing-FAW 42,294
6 Jili 27,827 Shanghai GM 39,704
7 Cherry 24,487 Cherry 34,695
8 GZ Honda 24,424 Shenlong PSA 32,976
9 Shenlong PSA 22,273 DF Nissan 29,191
10 Beijing Hyundai 21,910 Jili 26,029
2004 1st Q 2005 1st Q
Top 10 Sales PV Makes
units
Data source: CPVIA
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0.86
1.211.12 1.22
1.78
1.43
00.20.40.60.81.01.21.41.61.82.0
‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10
Oku-ton
Supply Demand
Hot rolled steel Oku-ton
0.16
0.300.22
0.40
0.40
0.55
0
0.1
0.2
0.3
0.4
0.5
0.6
‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10
Supply Demand
Cold rolled steel
Raw Material Price Hike
Supply and Demand
100
110
120
130
140
150
160
170
2003/12/end 04/5/17~21 04/8/23~8/27 04/12/6~10 05/3/28~4/1
Cold rolled steel Hot rolled steel Hot rolled steel in coil
Steel plate Zinc plate steel Overall Index
Steel Market Economics Trend
approx. 20%
>10%
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Energy Consumption – Oil
0.0
1.0
2.0
3.0
4.0
5.0
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05F '10F '15F
Oil consumption
Oil production
Oil import
Data source: CPEA
G ton
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Social & Environmental Issues
Emission Control Fuel Consumption
Safety Infrastructure
Stalled Traffic
Lack of Parking
Traffic Fatalities: 104,372 (’03) 99,217 (’04)
43.3 times of JPN<per UIO, 2003>
Source) China: MPS, Japan: NPA, JAIA
Step 1 Step 2
New regulation
New model
Existing
Jul/’05
Jul/’06
Jan/’08
Jan/’09
EUR1
EUR3
EUR4
EUR2
’03 ’04 ’05 ’06 ’07 ’08
<Beijing>
’09 ’10
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Contents
1. What is Dongfeng Motor Co., LTD?
2. China Market : Development and Business Environment
3. Strategy of Dongfeng Motor Co., LTD
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Strategy of DFL
Market and Customer Focus
Ability of “Producing Excellent Products”
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Brand Promise
NISSAN:
“ “Bold and Thoughtful”Bold and Thoughtful”
products beyond the expectations
“value for our customers”
SHIFT_
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TEANA
Proposal of New “Innovative Luxury Car”
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TEANA
Proposal of New “Innovative Luxury Car”
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TEANA – VQ35DE Engine
World’s 10 Best Engine <’93-’04>
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TEANA
“Car of the Year in 2005 Award in China”
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TIIDA
“All New Specious and Comfortable Sedan”
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TIIDA
“Brand-New Comfort Car”
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TIIDA – HR16DE
New Engine
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Passenger vehicle serious
Upper, middle & entry class cars and multi-purpose vehicle ( MPV )
2003 2004 2005 2006 2007
New introduction
Full model change
Minor change
Products Introduction Plan
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Sales & Service Network
100
>400*
150
0
100
200
300
400
500
2003 2004 2007
Number of Dealers
*) incl. 2nd tier dealers
Customer Satisfaction
SSI
CSI
2003 20042007
<objective>
No. 10 No. 5 Top level
No. 9 No. 5 Top level
NSSW (Nissan Sales & Service Way)
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State-of-the-art Technology
New Plant
R&D Site
QCD “KAIZEN”
NPW (Nissan Production Way)
– “Zero” inventory by synchronized production
– GENBA-KANRI, IE, Quality Management, etc.
– Huadu Vehicle Plant: May/’04 SOP (150K units)
– Xiangfan Plant: Sep/’04 SOP (70K units)
– Engine Plant: Beg/’06~ (360K units)
– PV New R&D Center: End/’05~ (330M RMB, 200,000m2)
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Our Destination
To be;
One of the Best Brand in China,
providing “Value for our customers”