By LIU Zeran
Chinese automaker Dongfeng Motor Group faces alarming performance issues this year. From January to July, car sales were 27.4 percent less than in the same period last year. Dongfeng issued a profit warning on August 14, predicting a staggering 75 percent drop in net profits.
The company blames the cost of transitioning to new energy, poor performance by joint ventures in general, foreign exchange losses and poor returns from equity investments.
Dongfeng brands like Honda, are doing remarkably poorly, with sales in H1 down by a third. Dongfeng Nissan, Dongfeng Peugeot-Citroën, and Dongfeng’s own passenger car company have all slumped by similar amounts.
To save itself, Dongfeng needs EV brands like Voyah and eGT New Energy to show quick growth, but their contributions to overall sales areas yet insignificant.
The market is the market, and there are as many winners as losers. If Dongfeng wants to be on the winning side of that equation again, it will need to reevaluate its strategies.
