Chinese Automaker Dongfeng Backs Up EV Rush With $440 Million

Just the Facts:

• Dongfeng wants the new-energy cars to account for 20 percent of its sales.
• The Chinese automaker has registered 67 patents for new-energy vehicles.
• Dongfeng said it will focus on hybrid cars before it turns to battery technologies for pure-electric cars.

SHANGHAI, China — China's third-largest auto group, Dongfeng Motor Corp., plans to invest $440 million over the next five years to hasten the commercialization of fuel-efficient and eco-friendly new-energy vehicles.

The company's green-car blueprint is the latest in a series of enthusiastic moves by China's domestic auto industry to further the development of new-energy vehicles, which are expected to attract $15 billion in investment over the next 10 years.

Dongfeng, the Chinese partner of Honda, Nissan and PSA Peugeot Citroen, said it will focus on hybrid cars for commercialization before extending self-developed battery technologies to pure-electric passenger cars and commercial vehicles.

The company, based in Wuhan, aims to sell 100,000 medium and full hybrid vehicles and 50,000 pure-electric cars a year by 2015. Its long-term plan is to make the energy-saving and new-energy vehicles account for 20 percent of its total Dongfeng-branded passenger cars.

Dongfeng will also strive to sell 800,000 new-energy vehicles through 2020.

"We have set new-energy vehicles as our mid- to long-term strategy, and we want to grab the business opportunity and lead the industry," Xu Ping, chairman of Dongfeng Motor, said.

Currently, Dongfeng has registered 67 patents for new-energy vehicles. More than 400 vehicles powered by new energies or energy-saving technologies are running on trial in cities such as Wuhan and Shanghai.

In early June, China announced plans to subsidize purchases of energy-efficient cars in five cities, with hopes to spur the sales of green cars by more than 4 million units by 2012.

That encouraged carmakers, including multinational brands such as Toyota and General Motors, as well as home-grown automakers such as BYD, to raise output of alternative-energy vehicles.

Source: Inside Line