Donfeng Motor

Donfeng Motor Corporation

    Overview: With Heavy Trucks to huge Market Share

    Donfeng Motor Corporation is a state-owned automotive manufacturing company, headquartered in Wuhan, China. It was established in 1969 under the name Second Automobile Works Co. and after some mergers was finally named Donfeng Motor Corporation in 1992. The two most important subsidaries of the company are Donfeng Motor Group Co. and Donfeng Automobile Co., Ltd.

    Traditionally, Donfeng was a commercial truck manufacturer, but nowadays the company offers a wide range of vehicles. These include trucks, buses and passenger cars.

    Dongfeng is one of the top four car manufacturers in China
    As a consequence of the expansion of its product range, Donfeng became one of the top four car manufacturers in China. In 2012, the company had a vehicle output of 3.2 million, with passenger cars accounting for 87 percent. According to Global Insights, Donfeng was the world's biggest truck manufacturer (trucks above six tons load capacity) in 2010, even if there are no exact statistics. In the same year, its passenger car division was ranked number two in China.

    The aim of Donfeng is to become the number one car manufacturer in China and to strengthen its competitiveness in the world. The main competitors of the company are especially other Chinese car companies that concentrate on truck manufacturing, too. These include Anhui Jianghuai Automobile Co., Ltd. and Beijing Automobile Works.


    Internationalization Strategy: Dongfeng, Chinese Champion in Joint Ventures

    At the beginning of the 1980s, Donfeng started a lot of joint ventures, including most of the Chinese car manufacturers as well as several foreign car brands. No other Chinese company started as many cooperations with foreign car brands as Dongfeng. The long list of foreign partners includes Volvo, Honda, PSA Peugeot Citroen, Kia Motors and Nissan.

    Dongfeng has the most joint ventures with foreign companies in the Chinese automobile industry
    With the the Swedish car manufacturer Volvo a China-based medium and heavy duty truck joint venture called Donfeng Commercial Vehicles was realized in 2012. At the moment, Donfeng plans to expand its global influence and therefore wants to acquire a 85 percent share of the US-based car manufacturer Fisker, but this plan was not commented yet.

    The most imporatnt overseas markets to sell its vehicles are Vietnam, Paraguay and the UK.


    R&D and Intellectual Property: The Chance of Electro Mobility

    In the beginning of its history, Dongfeng was very dependent on its foreign joint ventures. Most of its passenger cars were manufactured with the help and the know-how of its partners and often the cars were sold under a different brand name. This changed during the early 1990s. Due to the economic growth in China, more cars were needed and Donfeng wanted to meet this demand with cars of its own brand. Thus, the company started to spend more money on R&D. The big deficits compared to brands from overseas decreased very fast and the aim of satisfying the Chinese demand had been reached.

    In 2010, Dongfeng presented its first electric vehicle concept car at the Beijing Auto Show. The electronic car industry is not only an interesting field for Dongfeng, but also for the rest of the Chinese firms operating in the automobile industry.

    Donfeng's first R&D center outside of China was established in 2012, when the company acquired 70 percent of the Swedish engineering company T Engineering AB.

    The following charts represent the patent and utility model applications of Dongfeng. The main difference between a patent and an utility model is the durability and the strength of protection. Patents are protected for twenty years, while utility models are only protected for ten years. Thus, an utility model can be described as a weaker form of patent.

    The first chart illustrates the distribution of Donfeng's patent and utility model applications over time. The number of applications increased steadily, resulting in a maximum of more than 500 patent and utility model applications in 2010. Surprising is the fact, that there is no decrease in the period around 2009. In this period, most of the Chinese car manufacturers had to struggle with the consequences of the financial crisis and the number of applications decreased.

    The chart below shows the geographical distribution of patent and utility model applications. Donfeng filed most of its patents in China. Only an inferior amount was registered in foreign regions. It is likely, that the number of foreign patent and utility model applications will increase in the future, because Donfeng established its first foreign R&D center in 2012.

    Donfeng filed most of its applications in the technology area transportation. This is not surprising, as Donfeng is one of the biggest truck manufacturers worldwide. Nearly 25 percent of all patent and utility model applications were filed in this area. The rest of the applications are spread consistently. The high number of applications in "others" is an indicator for the wide range of activity fields in its R&D division.


    References:

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