Dongfeng looks overseas for R&D
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E-mail China Daily, October 22, 2012
Dongfeng sold 3.06 million vehicles last year, including 2.33 million passenger vehicles, mostly built by its joint ventures.
Its 2012 target is to deliver 3.3 million vehicles.
"Dongfeng's new deal is in line with the government's call for domestic carmakers to go abroad and seek solid technological resources," said Zhong Shi, an independent auto analyst in Beijing.
"Buying foreign technology is a shortcut for domestic carmakers to improve competitiveness, faster than doing all work all on their own," Zhong said.
Zhejiang Geely Holding Group, the parent of Geely Automobile, bought Australia's automatic transmission supplier Drivetrain Systems International in 2009.
In the same year, Beijing-based BAIC Group acquired the Saab 9-3 and 9-5 models and related engine technologies. The automaker also bought all equipment and core technologies of Swedish gearbox maker Weigl Transmission in 2011. Using the acquired technologies, the company plans to introduce a slew of new models carrying its own marques.
"It's good to see more Chinese carmakers participate deeply in international acquisitions," said Wu Jinghui, director of consulting firm AlixPartners. "They are learning to seek the resources they need from the vast international market."
She noted that buying expertise has a better investment return than acquiring a big package of assets, which seems more attractive but carries more risk.
Dongfeng said it plans to expand overseas R&D beyond electronic controls to drivelines and car platforms, and attract more European talent in automotive technologies.
The company added that its R&D team already started cooperation with T Engineering at the beginning of the year on three projects, yet declined to disclose the details.
In addition to Dongfeng, many domestic carmakers have already set up overseas R&D facilities to support the development of homegrown branded vehicles and narrow the gap with world-class products by foreign counterparts.
Shanghai-based SAIC Motor Corp, invested in an R&D center in the UK in 2005, which had played an important role in the introduction of the carmaker's wholly owned Roewe and MG vehicles.
Chang'an Automobile Group, headquartered in Chongqing, established its most recent overseas R&D center in Detroit last year, following facilities in Italy, Japan and the UK.
Domestic manufacturer Foton and JAC Motor also have R&D units abroad.
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