Principally engaged in the manufacture and sale of automobiles, engines and other automotive parts and rendering of financing services.
The Group's profit attributable to shareholders for the year ended 31-12-2018 amounted to RMB 12.98 billion, a decrease of 7.7% compared with previous corresponding period. Basic earnings per share was RMB 1.5064. A final dividend of RMB 0.25 per share was declared. Turnover amounted to RMB 104.54 billion, a decrease of 17.0% over the same period last year, gross profit margin down 0.1% to 12.8%. (Announcement Date: 27 Mar 2019)
Business Review - For the year ended December 31, 2018
In 2018, there were increasing challenges in the world, while China’s economy turned stable with slight changes, and industrial upgrading and transformation in the China’s automobile industry was performed as stipulated by policies and regulations. The overall market was affected by factors such as the decline in macroeconomic growth rate, the complete withdrawal of preferential policies for purchase tax, the Sino-US trade friction and lack of consumer confidence, showing a first negative growth in 28 years. The aggregate number of vehicles sold throughout the year amounted to approximately 28,080,600 units, representing a year-on-year decrease of 2.8%. The overall automobile market showed accelerated declining, cross-border competition, transformation and upgrading, as well as differentiation and elimination in the following aspects: the passenger vehicles market continued to decline with fragmented structure. The sales volume of passenger vehicles was 23,709,800 units, representing a year-on-year decrease of 4.1%. The year-on-year cumulative growth rate of luxurious vehicles was relatively rapid, and the sales volume of non-luxurious vehicles of joint venture brand continued to decline, while the survival of fittest of own brand passenger vehicles was becoming more pronounced. The growth rate of production and sales of commercial vehicles declined, and the sales volume of commercial vehicles reached 4,370,800 units throughout the year, representing a year-on-year increase of 5.1%. And the sales volume of new energy vehicles grew steadily and rapidly, with sales volume of 1,256,000 units throughout the year, representing a year-on-year increase of 61.7%. The “New Five Megatrends” (新五化) of automobiles accelerated the replacement and integration, which was reshaping the industrial formation.
In 2018, the total sales of Dongfeng Motor Group for the year were approximately 3,052,200 units vehicles. The sales revenue of the Group was approximately RMB104,543 million, representing an decrease of 17.0% as compared with the corresponding period of last year. Based on the proportionate consolidation method, the sales revenue of the Group for the whole year amounted to approximately RMB252,162 million, representing a decrease of 8.0% as compared with the corresponding period of last year. Among which, the sales revenue of passenger vehicles amounted to approximately RMB175,904 million, representing a decrease of 9.0% as compared with the corresponding period of last year; the sales revenue of commercial vehicles amounted to approximately RMB72,957 million, representing a decrease of 5.4% as compared with the corresponding period of last year. In 2018, profit attributable to shareholders was approximately RMB12,979 million, representing a decrease of 7.7% as compared with the corresponding period of last year.
The operation of Dongfeng Motor Group had the following characteristics in 2018:
1. Maintaining healthy and stable operation. Approximately 3,052,200 units vehicles were sold during the year. Over 10 new products of passenger vehicles such as the new generation of Dongfeng Aeolus AX7, New TEANA, QX50, C4 Aircross, New 408 were launched during the year. The product structure continued to be optimized, and the proportion of medium-to-high-end products increased, resulting in higher added value. The Company continued to build its leading edge in commercial vehicles. The new generation of Tianlong KL heavy-duty truck and Dongfeng Tianjin KR medium-duty truck was launched in the market, and the product strength continued to improve.
2. Continuing to build core capabilities of self-owned brands and promote new business to achieve new development. The Company continued to enhance the core capability establishment of self-owned brand passenger vehicles in product platforms, technologies, powertrains and electronic structure, focusing on the national six technologies with a variety of self-owned engines achieving SOP. The Company continued to build a leading advantage in commercial vehicles, enhancing capabilities of the full value chain system, and building the leading edge in core technologies and resources such as complete vehicles and engines, gearboxes and axles.
3. Continuing to promote the “Five Megatrends” and actively cultivating innovative ecology. The Company vigorously promoted research on basic technology and forward-looking technology, and closely focused on the development trend of the “Five Megatrends” of the industry to strengthen technical research and application of results. We improved the technical level of “power batteries, electric engines and electronic control systems” of new energy, and accelerated the loading and configuration of core resources. We sped up the development of repeated driving algorithms for self-driving, and developed driverless vehicles. We also formulated and implemented smart network and travel service plans, promote deep integration of digitalization and business , and procured expeditious implementation of new business strategic layout of the Company, and accelerated the shifting of new and old momentum. The Company strengthened collaborative innovation, actively carried out cross-border cooperation, carried out T3 cooperation with FAW and Chang’an, and achieved progressive results in science and technology, manufacturing and travel services.
4. Adhering to active leadership and promoting high standards of openness. The Company enhanced the initiative in strategic planning, resource allocation, cooperation and exchange in the joint venture, promoted the deep reform of the joint venture company, and maintained a healthy development of the joint venture as a whole. We made full use of international partners to enhance our independent development capabilities, jointly developed e-CMP modular platform with PSA, jointly developed EV and PHEV with Renault-Nissan Alliance, and promoted the e-Power localization project in an orderly manner. Business units such as Dongfeng Nissan and Dongfeng Honda withstood downward pressure in the market, and achieved contrarian growth to outperform the market.
Business Outlook - For the year ended December 31, 2018
Faced with the changing international macro environment and increasing uncertainties, the 2019 overall trend of China''''s automobile market is expected to be basically the same with last year. In the next five years, the average annual growth of the industry is expected to be around 2-3%, with an average annual growth rate of approximately 4% in passenger vehicles and an average annual growth rate of approximately -2% in commercial vehicles.
According to the judgement of motor market development trend and new pattern of motor industry in the future, Dongfeng Motor Group has set up detailed strategic plans, and determined the strategic deployment of “Three Leading, One being the First”. The Company will strive for achieving the leading position in the operating quality, self-owned brand business and new business, and ensure that employees can enjoy priority with a better life in a new era. In order to implement the strategy, the Company will deepen the strategic research and market bench-marking, together with the actual rolling updates on the interim business plan to maintain steady and healthy development in the fierce market competition. The Company will maintain its strategy with its focus of business and development on the following four aspects in the future:
First, consolidating the core capability to promote the self-owned brand business to make a breakthrough.
Second, accelerating the development of new energy business, enhancing the layout of intelligent connectivity and service businesses, further improving the integration and innovation of “Five Megatrends” and possessing core technology.
Third, promoting sustainable development of joint venture and improving the level of joint venture cooperation.
Fourth, continuously enhancing management and speeding up the construction of digital Dongfeng.
Confronted by the complex industry situation, Dongfeng Motor Group will adhere to the reform and innovation and accelerated transformation and upgrading to achieve “Three Leading, One being the First”, and continuously promote high quality development of the Company.
Source: Dongfeng Motor (00489) Annual Results Announcement