Dongfeng to Invest in $2.5 Billion to Develop Its Own Brands

Dongfeng Motor Corp. plans to invest 15.7 billion yuan ($2.5 billion) over the next seven years to develop models for its own passenger vehicle marques, China Daily reports.

Dongfeng said earlier this month it intends to establish multi-brand dealerships across China to sell its Fengdu, Fengshen and Fengxing sub-brands.

Company officials tell the newspaper that it will introduce at least two new models per year across the three makes through 2020. Dongfeng's sub-brands, which boosted sales 27% to 515,200 vehicles last year, are targeting volume of 1 million units by 2016.

Fengdu (also known as Zhengzhou Nissan) sells pickup trucks, MPVs, SUVs and vans made at a Dongfeng Nissan factory. Fengshen builds four small car and SUV models from its base in Wuhan. The marque, which debuted in 2009, unveiled the H30 Cross compact SUV at the Shanghai auto show last week and is developing an electric city car. Fengxing, which produces MPVs in Liuzhou, plans to launch several sedans and SUVs next year.

Dongfeng also sells vehicles under the badges of partners of Honda, Kia, Nissan and PSA Peugeot Citroen. It introduced the China-specific Venucia brand with Nissan last year and will be a partner with Yueda and Kia in the new Horki marque announced last week.

In the past five years the Chinese government has prodded the country's major automakers and their foreign joint venture partners to foster domestic brands. But the share of such makes slid to one-third of the country's car market last year, down from about half less than four years ago.