| Dear Shareholders, |
On behalf of the Board of Directors, I hereby present the annual report of the Company for 2010 for your review.
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In 2010, PRC auto industry maintained its fast growth momentum. Approximately 18,060,000 vehicles were sold by domestic automobile manufacturers, representing an increase of approximately 32.4% over last year. Sales volume of passenger vehicles and commercial vehicles were approximately 13,760,000 units and 4,300,000 units respectively, representing an increase of 33.2% and 29.9% over last year. Chinese auto industry has entered a mass consumption stage, offering the industry an “Golden” development period. Both production and sales volume grew significantly with remarkable achievements in technology advancement. Meanwhile, industry profitability is further enhanced with improved management and cost control capability and optimized sales and distribution networks.
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In 2010, Dongfeng Motor Group successfully grasped the market opportunities and achieved outstanding market performance with quantitative and qualitative growth in the financial results. In 2010, the aggregate number of vehicles sold by Dongfeng Motor Group was approximately 1,950,000 units, representing an increase of approximately 36.0% over last year, which was 3.6 percentage points higher than industrial average. Sales volume of passenger vehicles and commercial vehicles were approximately 1,420,000 units and 530,000 units, representing an increase of approximately 33.9% and 41.9%, respectively over last year, which were 0.7 percentage point and 12.0 percentage points higher than industry average. Aggregate sales of the parent company amounted to 2,620,000 units, accounting for 14.5% of PRC market share.
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In 2010, the Group’s sales revenue was approximately RMB122,395 million, representing an increase of approximately 33.4% over the last year. Profit attributable to shareholders of the Company was approximately RMB10,981 million, which was approximately 75.7% higher than that of last year. Profitability indicators such as the gross profi t margin proved that operating efficiency of Dongfeng Motor Group kept enhancing and consolidating.
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In 2010, major business segments of Dongfeng Motor Group achieved steady and coordinated development. By implementing its business strategy, Dongfeng Motor Co., Ltd achieved a strong sale of 1,280,000 units, successfully exceeding the 1 million units mark. Dongfeng Peugeot Citroen Automobile Co.,Ltd was back on a sound development track through upgrading its product mix and constant improvement of its brand value, and achieved sales volume of approximately 370,000 units in 2010.Dongfeng Honda Automobile Co., Ltd continued to deliver a remarkable performance with a sales volume of 260,000 units through fully exploiting potential of its existing products and enhancing its marketing capability.
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In terms of investment, the Group continued to adhere to its prudent investment policy, which is to attach importance to cost control and investment quality while safeguarding steady expansion and advancement in each business segment.In 2010, total investment was RMB7.07 billion. As at the end of 2010, the Group’s total production capacity was approximately 1,740,000 units with 5 brand new models and 2 face-lift models launched in the whole year.
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Dongfeng Motor Group continued to exert effort in promoting its own brand of passenger vehicles, Dongfeng “Fengshen” in 2010. However, the annual targets were not reached due to various factors, such as brand recognition, quality and technology and the expansion of market networks. In the future, the Group will spare no efforts to improve the performance of its own brand passenger vehicle business through enhancing its management capability, inputting more capital and human resources, improving its brand image and constant expansion of distribution networks.
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2011 is the first year of China’s “Twelfth Five-Year Plan” and the development of automobile industry in the PRC will turn to a new page. China’s automobile industry will maintain its rapid growth and the industrial restructuring progress will be faster with more apparent effects. Application of new energy technology will be further promoted. Facing both opportunities and challenges, Dongfeng Motor Group will uphold its cooperative and open attitude to enhance scientific management level and refine its product portfolio and business strategies. Furthermore, the Group will put more efforts in brand building and developing its own branded business. The Group will also speed up the research and development and application of new energy technology and strengthen the management system of the Group to cope with future competition. Entering into the new era, Dongfeng Motor Group will continue to adopt its “profit oriented” principle and further improve its operation quality. In addition, the Group will further expand its operation scale, consolidate its competitive edge and improve its market share on basis of maintaining and enhancing its profitability, so as to create long term sustainable value for our shareholders.
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Xu Ping |
Chairman |
Wuhan, the PRC |
30 March 2011 |
