Dongfeng buyouts 40% of Fujian Auto in order to own the Souest brand
 

The Chinese government has repeatedly urged Chinese carmakers to come together in order to fight against the world's leading carmakers such as Toyota, GM, Volkswagen, Renault-Nissan and Hyundai-Kia (see "The Chinese groups' multi-brand strategy called into question"). Currently, China has a hundred different carmakers, some of which include a number of specific brands.


A few years ago, we saw Nanjing MG come under the control of SAIC, but the Chinese are still few groups, each carmaker trying to preserve its own prerogatives in a growing market that has not yet fixed the sale volume per brand. Each brand is trying to be among the most widespread, before even considering the purchase of a smaller company or other Sino-Chinese partnerships.


Today, Dongfeng (the third Chinese automaker including the JV with foreign carmakers) took the initiative to buy 40% of Fujian Motor, the owner of Souest. Souest sold 80,000 cars in China last year and could sell 100,000 this year (35,000 in the first four months of 2013). Its market share is less than 1% of the whole Chinese market. The Dongfeng carmaker sold 370,000 cars under its own brand in 2012 (2.5% market share) and over 2 million cars thanks to a partnership with Nissan, Kia, Honda and PSA.


With Soueast, Dongfeng could approach 5% market share in China while having a new plant with a capacity of 150,000 vehicles per year.

13-20-9

 

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