Beijing -- Nissan Motor Co., Ltd. (Nissan) and DongFeng Motor Corporation (Dongfeng) announced today that the new company, Dongfeng Motor Co., Ltd., jointly established based on their comprehensive strategic partnership, will begin operations on July 1, 2003. Wei Miao, president of Dongfeng, will assume the role of chairman of the new company and Katsumi Nakamura, senior vice president of Nissan, will assume the role of president.
Since the announcement of their long-term strategic partnership on September 19, 2002, both parties have worked closely to finalize the establishment of the new company. The project was submitted to the former State Economic and Trade Commission and the former State Development Planning Commission and was approved in March this year.
The co-operation program between Nissan and Dongfeng received strong support from the Chinese government. Under the guidance of various authorities, the procedures necessary for establishing Dongfeng Motor Co., Ltd., have now been completed. Both parties initialed the contract and reported to the Ministry of Commerce, which provided approval on April 29. The State Industrial and Commercial Administration Bureau issued an operation license on May 20.
Registered capital of the new company is RMB16.7 billion (JPY240 billion, USD 2 billion), with Nissan and Dongfeng each holding 50% of equity. Dongfeng will make a series of capital contributions in the form of existing assets, including equities of its relevant subsidiaries and affiliates. Corresponding with Dongfeng's contributions, Nissan will make its capital contribution in cash. The headquarter of the company will be in Wuhan, Hubei Province. A central hub of operation will be set up for each business unit. The total number of employees, including affiliated companies, will be 74,000.
Dongfeng Motor Co., Ltd., will be the first Sino-foreign full-line automobile joint venture in China with product lines ranging from trucks, buses and light commercial vehicles to passenger cars. Its passenger vehicles will carry Nissan brand, whereas commercial vehicles mainly carry the Dongfeng brand. The sales target of the new company is to reach 550,000 unit sales (220,000 units passenger vehicles, 330,000 units commercial vehicles) by 2006.
The new company's board of directors will consist of eight members, four each from Nissan and Dongfeng. Wei Miao, the chairman, will conduct the board meetings. Among the board members, Katsumi Nakamura, Toshiyuki Shiga, Bernard Rey and Kimiyasu Nakamura are from Nissan; Wei Miao, Ping Xu, Zhangmin Liu and Wenjie Zhou are from Dongfeng.
The Management Committee, which includes Katsumi Nakamura as president and seven vice presidents, will discuss and decide on operation and management issues. Three vice presidents are from Nissan: Shigeki Nagano, Mamoru Yoshida and Atsushi Komatsu. Four vice presidents are from Dongfeng: Ping Xu, Shaozhu Li, Dongcheng Tong and Jie Ouyang. The management expertise of Nissan and Dongfeng will complement each other to fully realize the potential foreseen in the newly established Dongfeng Motor.
A working team formed under the management committee will develop a mid-term business plan for the new company, building upon the plan made from early phase discussions between the two parties. Based on recommendations of this team, the new Dongfeng management will decide the official business plan for the new Dongfeng by the end of November 2003.
Current plans call for six additional new passenger car models beyond Bluebird to be produced in Dongfeng Motor Co., Ltd., by 2006, with Sunny (Yang Guang) being the first. Sunny will be produced at the Huadu plant in Guangzhou and is expected to go on sale nationwide in China starting this June. The new Sunny, which was unveiled at Auto Shanghai 2003 on April 20, will enter China's rapidly growing compact car market. Teana, a luxury sedan successfully launched in Japan in February 2003, will also be produced by the new company in 2004.
*Note: Currencies are converted based on the recent exchange rates -- 1 RMB per 14.5 JPY; 1RMB per 0.12 USD; 1USD per 120 JPY.