Dongfeng Motor Group is eyeing opportunities for mergers and acquisitions in the global auto sector recovering from the global downturn, its chairman has said.
“The company will closely monitor opportunities for overseas acquisitions,” Chairman Xu Ping told Reuters at a Wednesday press conference.
He added that appreciation of China’s currency, the yuan, which many believe will take place in the next few months, would further strengthen Dongfeng’s position in making any acquisitions.
Dongfeng is the Chinese joint venture partner of Nissan Motor , Honda and PSA Peugeot Citroen , and had CNY17.4bn (US$2.55bn) cash and cash equivalents on hand at the end of 2009, up from CNY7.2bn at the end of 2008.
It will target assets overseas and at home that can lift the core-value of the China state-owned company.
Xu expects China’s automobile industry will keep growing at a relatively rapid pace in 2010. “China’s automobile market is entering a mass consumption era,” he said.
The company estimated China’s vehicle sales will rise about 10% to 15m units this year after growing 46% in 2009.
Dongfeng aims to sell 1.65m to 1.7m vehicles this year, up 15-18% year on year. The company sold 1.43m vehicles, up 35% with sales of passenger vehicles rising 45.6% to about 1.06m.
That will see market share rising to about 11% from 10% in 2009, Reuters noted.
The strong sales in 2009 lifted net profit for the year by 58% to CNY6.25bn.