Dear Shareholders,

On behalf of the Board of Directors, I hereby present the 2024 interim results of Dongfeng Motor Group for your review.

In the first half of 2024, the sales volume of the automobile industry maintained a growth at 6.1%, but the growth rate declined month by month, with the industry’s demand being differentiated and the situation being more complicated. New energy vehicles and overseas exports became the main growth drivers, growing by 32% and 30.5% year-on-year respectively, with the penetration rate of new energy vehicles reaching 35.2%. Sales volume of the independent brand passenger vehicle business increased by 23.9% year-on-year. Sales volume of the joint-invested non-luxury vehicle segment and internal combustion engine vehicle segment continued to decline. Since the beginning of last year, the terminal price of passenger vehicles has decreased by 15.6%.

Dongfeng Motor Group has actively responded to changes in the industry, accelerated the optimisation of its business layout and structural adjustment, strengthened scientific and technological innovation, achieved an upturn and improvement trend in its operations, and made every effort to promote high-quality development.

The Group sold approximately 966,100 vehicles, representing a year-on-year increase of 2.2%. Among them, the independent brand passenger vehicle business achieved sales volume of approximately 188,000 units, representing a year-on-year increase of 19.9%, with both its sales volume and price increasing, and the gross profit margin increased by 4.7 percentage points over the corresponding period of last year. The commercial vehicle segment recorded sales volume of approximately 191,400 units, representing a year-on-year increase of 8.9%. The new energy vehicle segment achieved sales volume of approximately 153,600 units, representing a year-on-year increase of 28.5%, indicating an improvement of 3.3 percentage points in the contribution to the Group’s overall sales performance over the same period. The Group’s joint invested vehicle business basically stabilised and halted the decline, recording sales volume of approximately 587,000 units; particularly, sales volume of Dongfeng Nissan dropped year-on-year by 1.4% and Dongfeng Honda increased year-on-year by 4.8%. The export business registered a sales volume of approximately 93,000 vehicles, a year-on-year increase of 14.8% and hitting a record high.

The Group achieved sales revenue of RMB51,145 million, and net profit attributable to equity holders of the Company of RMB684 million. Its asset-liability structure was robust, and the gearing ratio stayed at 51.0%. Its cash reserve was abundant, reaching nearly RMB100 billion at the end of the Period, and its cash flows from operating activities increased by RMB6,991 million year-on-year.

In the first half of the year, the Group made positive progress in its work.

The accelerated development of new energy vehicles. The Group accelerated the launch of new products and introduced new products such as Dongfeng NAMMI01, Dongfeng eπ007 and 008, Dongfeng VOYAH FREE318, Dongfeng Aeolus L7 and Dongfeng Forthing Xinghai V9. Among them, the sales volume of eπ007 and 008 saw immediate growth since the launch, with eπ007 ranking among the top 3 in terms of sales among medium and large-sized pure electric sedans of the 150,000~200,000 class, and eπ008 ranking first among 6-seat new energy SUVs priced at less than RMB250,000; the Dongfeng Aeolus L7 has achieved a comprehensive range exceeding 2,000 kilometers, while the VOYAH Dream ranks second in terms of sales among new energy MPV models in the industry. The Group developed a dedicated platform for new energy commercial and passenger vehicles. In the passenger vehicle segment, the M-Hero platform, Quantum Architecture, and DSMA Architecture have successfully enabled the mass production and delivery of multiple models, further enhancing the product deployment. In the commercial vehicle segment, the major commercial vehicle platforms such as T1 platform for heavy, medium, and light-duty vehicles, and the T2 platform for both passenger and commercial use accelerated product layout. Major new energy projects are progressing steadily, with achievement in the in-house manufacturing, industrialization, and localization of key resources for the “three core e-components”.

Swift yet steady structural adjustments. By focusing on its core responsibilities and main business areas, the Group promoted specialized integration and optimization across its independent brand passenger vehicles, commercial vehicles, parts & components, and automotive finance businesses. To this end, the Group has established the Dongfeng Independent Brand Passenger Vehicle Operations Committee, the Commercial Vehicle Division, the Components Division, and the Group’s Financial Business Development Committee, further consolidating resources in procurement, manufacturing, and marketing to drive the concentrated development of independent brands and new energy vehicles. The Group also built a “1+n” research and development system, pooling research and development resources to promote a platform-based and modular R&D model. It implemented a PM system to strengthen the entire product lifecycle management and establish mechanisms to create blockbuster models. To optimize the incentive and restraint mechanism, a dual-target system has been introduced, implementing dual-goal rigid assessment management of “current objectives + medium-long-term capability building”. Monthly and quarterly performance assessments were published in “red and black lists”, encouraging teams to strive for high targets.

Solid progress in technological innovation. The Group laid out key core technologies, focused on the two major tracks of new energy and intelligent driving, and advanced national research projects and major internal technology initiatives, with a strong push for the development and application of next-generation technologies such as skateboard chassis, solid-state batterie, hydrogen fuel cell, centralized electronic architecture, proprietary operating systems, proprietary chips, intelligent driving, and 800V/6C ultra-fast charging. The Group has increased its investment in science and technology, strengthened the research and development of new energy vehicles under its independent brand, built a global innovation center, a global modeling center, etc., and comprehensively improved its software and hardware capabilities. It enhanced the docking and cooperation among enterprises, universities and research institutes, carried out joint development and technological research, vigorously cultivated and introduced scientific and technological talents, and promoted the transformation of scientific and technological achievements. At the 4th “China Automotive Summit” hosted by CCTV, the M-Hero 917 and VOYAH Passion PHEV and others won four awards.

Fully stabilizing the foundation of joint ventures. To facilitate the electrification transformation of joint venture businesses, Dongfeng Honda has introduced the dual-brand “H+Lingxi”; Dongfeng Nissan has launched the “New Fight 100 Action Plan”; while DPCA has been integrated into Dongfeng’s self-developed models. The Group has made significant strides in exploring the market for fuel-efficient vehicles, continuously optimizing network layouts and speeding up its business network’s “expanding into lower-tier cities” and the “western areas”. We have innovated our business models, improved customer retention and marketing strategies, and elevated after-sales service level. Additionally, we have focused on enhancing profitability, vigorously expanding the aftermarket business, advancing domestic substitution and local supply, and rigorously pursuing cost reductions and efficiency gains. Concurrently, we have enhanced strategic communication among multiple levels, ensuring that foreign shareholders have a deeper understanding of domestic market dynamics, and collaboratively advancing the transformation, upgrading, and sustainable development of joint ventures in the new era.

Next up, the group will focus on its objectives and actively promote extreme cost reduction to enhance profitability, improve sales and profit structures, and fully commit to driving steady and progressive operational development. We will accelerate the pace of transformation and upgrading, and strive for greater dynamism, reform, innovation, and transformation. We are determined to promote high-quality development, aiding all shareholders in achieving value growth.

Finally, on behalf of the Board, I would like to express my sincere gratitude to all shareholders for their continued support and dedication.

Yang Qing

Chairman

Wuhan, the PRC

29 August 2024