DONGFENG MOTOR Co., Limited MID-TERM BUSINESS PLAN

Transcription

1 DONGFENG MOTOR Co., Limited MID-TERM BUSINESS PLAN December Dongfeng Motor Co., Ltd. K. Nakamura, President & CEO

2 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

3 I. Introduction Dongfeng Motor Co., Limited established June, 2003 Partnership Structure Before After Dongfeng Motor Corporation Dongfeng Motor Corporation Dongfeng Motor Corporation Dongfeng Motor Corporation Dongfeng Motor Co. LTD Dongfeng Motor Co. LTD Dongfeng Automotive Industry Investment Co., Ltd. Nissan Motor Co. Ltd. Nissan Motor Co. Ltd. By Asset 50% 50% Name inherited By Cash Non-automotive companies, etc. PSA/Honda JVs Core automotive operations Non-automotive companies, etc. PSA/Honda JVs Dongfeng Motor Co., Ltd. Dongfeng Motor Co., Ltd. Core automotive operations Commercial vehicle business Passenger vehicle business Equipment business Parts business

4 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

5 II. Brief Background 1. Focus of the largest foreign investment in the Chinese auto industry, at $2 Billion 2. Deepest partnership in terms of cooperative level management, technology exchange, brand management DONGFENG BRAND Strong CV brand in China Comprehensive CV line-up Steady track record sales Large-scale, operational assets Dedicated and experienced staff Wide distribution network NISSAN BRAND Strong global brand Full range of passenger vehicles Advanced R&D and technology Industry leading production technology and methods Top class management expertise Strong financial processes and management systems

6 II. Brief Background One Company, Two Brands DONGFENG BRAND -Commercial Vehicles - NISSAN BRAND -Passenger Vehicles - Sunny Bluebird new models by

7 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

8 Create Value with Sustainable Profitable Growth Commercial Vehicles: Global Top 3 Passenger Vehicle: One of the best brand in China, providing Value for our customers

9 Commercial Vehicles: Global Top 3 O.P. Margin (%) [HDT & MDT Business] 10% A 07 5% a b c B d 03 C A, B, C : Global manufacturer a, b, c : Chinese local manufacturer Vol. (000 units)

10 Passenger Vehicle: Leader One of the best brand in China, providing Value for our customers CSI Best level Above ave. Average Below ave Vol. (000 units)

11 Plan 2 3 : Plan Two Cubed (= 2x2x2) Three Perspectives of Strategy I. Growth II. Operational Enrichment Two times the sales volume and revenue 2 2 Double-digit Operating Margin III. Learning 2 partners

12 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

13 DFL TOTAL: Double vehicles sales volume for 4 years Passenger Vehicle (PV): +224k ( 74k, k, 07) Commercial Vehicle (CV): + 94k (226k, k, 07) Sales Volume Plan Commercial Vehicles Passenger Vehicles

14 Commercial Vehicle Product Line-up Newly Introduced Full Model Change Minor Change Heavy, Middle & Light Duty Trucks and Buses Passenger Vehicle Product Line-up Small, Medium, Upper Cars & MPV

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16 Commercial Vehicle Product Line-up Newly Introduced Full Model Change Minor Change Heavy, Middle & Light Duty Trucks and Buses Passenger Vehicle Product Line-up Small, Medium, Upper Cars & MPV

17 Sunny Teana for Japanese Market

18 DFL TOTAL: Double vehicles sales volume for 4 years Passenger Vehicle (PV): +224k ( 74k, k, 07) Commercial Vehicle (CV): + 94k (226k, k, 07) Sales Volume Plan Commercial Vehicles Passenger Vehicles

19 R&D Capability Enhancement Commercial Vehicles: No.1 R&D Capability in China Passenger Vehicles: Localization & Capability Development to introduce new products timely QCD target achievement Technological knowledge, processes and R&D management know-how Technical Cost Reduction : 35%(CV), 50%(PV) of the purchasing cost reduction Quality Improvement : Target achievement of internal quality index

20 Sales & Service Quality Management Expansion of high quality sales & network Uniform approach to sales policies & standards Number of 3S Dealer (CV) Number of Sales Network (PV) > >

21 Further Business Expansion of CV Improvement of service & after-sales parts business Expansion of remodeling business (Special Purpose Vehicle) Shift to assembled bus business (incl. Plant rationalization) Export business opportunities

22 Existing Resources Efficiency No Plant Closures Increased rationalization and capacity utilization Stable employee headcount Contracted Employee headcounts Productivity 000 persons units/employee

23 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

24 Operational Enrichment Purchasing Cost Reduction Centralized Purchasing Establishment of Competitive Suppliers Panel Technical Cost Reduction (R&D / Manufacturing) % Cost Reduction Target VS 2003 <Average in the scope of cost reduction activities> Commercial Vehicles Passenger Vehicles (%)

25 Operational Enrichment Major Production Hubs Commercial vehicles: LCV, pickups Passenger vehicles: Bluebird, new models Engine: Machinery and assembly Xinjiang Dongfeng Xingjiang Automobile Co., Ltd. Commercial: H, MDT and buses chassis Engine: Machining and assembly Components: Transmissions, axles, Radiators, interior parts, power steering, others Equipments: Dies, Tools, Machining center Xiangfan Shiyan Liuzhou Dongfeng Liuzhou Automobile Co., Ltd. Wuhan HQ* Registered address Dongfeng Hangzhou Automobile. Co., Ltd. Dongfeng Nissan Diesel Guangzhou Passenger cars: Bluebird, Sunny ( ), ), new models Engines: Machinery and assembly

26 Operational Enrichment Manufacturing Efficiency Productivity Improvement Eg. Genba-Kanri, IE, Plant Rationalization, Optimum Production Allocation 000 persons 30 Productivity Improvement (CV) Direct + Semi-direct labor Productivity

27 Operational Enrichment Improvement in Supply Chain Management Logistics Expenses Reduction Reconstruction of logistics network Operational efficiency improvement Inventory Reduction Flexible production control Integrated total logistics managemen Logistics expenses reduction ratio % days Commercial Vehicles (VS 03 actual) 35 Passenger Vehicles Vehicle Inventory Reduction Days Supply Commercial Vehicles Passenger Vehicles

28 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

29 Learning People determine How effective in Management / Operation Quality & Speed Company culture and mindset evolution to enhance performance : Establish a Learning Culture Company-wide management innovation Learning & Implementation of Global Management Practice Human Resources capabilities enhancement Educational training, Performance-based appraisals & rewards

30 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

31 IV. Financial Projection Key Financial Figures 2003 Jul. - Dec. ** (000 units, 100 million RMB) Sales Volume ( ) : Full year (300) CV (226) PV (74) Sales Revenue Operating Margin 8.0% 8.0% 10.0% Operating Profit Net Debt CAPEX * * : 4 years total is expected to be 15 billion RMB **: Figures for 2 nd half of 2003 on the full scope basis of DFL

32 Agenda I. Introduction II. Brief Background III.Mid Mid-term Business Plan Operational Enrichment Learning IV.Financial Projection V. Conclusion

33 V. Conclusion A globally competitive, comprehensive automotive manufacturer Name of the Plan: Plan 2 3 (Plan Two Cubed) 2x2x2 = 8 Sales Volume of 620 k units, Sales Revenues of 80 billion RMB in 2007 Operating Profit Margin of 10% in 2007 Strong, unique partnership 2 Double Sales Volume & Revenue Growth 2 Double digits in profitability (= O.P. margin) Operational Enrichment Unity & Harmony by DF and Nissan (2 partners) Learning

34 DONGFENG MOTOR Co., Limited MID-TERM BUSINESS PLAN Plan 2 3