Dongfeng is off to a good start in building a proprietary car brand

Though I still stick to the view expressed in my column earlier this year that Dongfeng Motor Corp. should concentrate on its commercial vehicle business, I have to say I am pretty impressed by the efforts this old state-owned company has made to build its own car brand.

Established in the late 1960s, Dongfeng is one of China's oldest automakers. It is also the third largest automaker in China by revenue, next only to Shanghai Automotive Industry Corp. and China FAW Group Corp.

But one thing that sets Dongfeng apart from other state-owned automakers is its down to earth approach towards to building its own car brand.

SAIC has built two models under its own Roewe brand by using an old Rover platform it bought from MG Rover in 2005. FAW, meanwhile, has developed its Besturn-branded sedan on the Mazda 6 platform. This summer, another state-owned automaker, Beijing Automotive Industry Corp., attempted to acquire the Opel brand from GM but failed.

But Dongfeng has chosen not to take a short cut. Earlier this year the company said it had no plan to acquire the Volvo car brand, citing high risks associated with overseas acquisitions.

After nearly four years' preparations, the company's first own brand car, the three-box Aelus S30 compact sedan, went on sale on the domestic market in July this year.

The car is a brand new model, not a copycat of an international model.

It is fitted with engines supplied by Dongfeng Peugeot Citroen, which is Dongfeng's joint venture with PSA Peugeot Citroen SA. Transmissions in manual models also come from Dongfeng Peugeot Citroen, while transmissions in the automatic models come from a China-based plant of Japanese supplier Aisin Seiki Co. The car offers value for money with a price tag of 75,800-99,800 yuan ($11,098-14,612).

The other thing I like about Dongfeng is the skills its managers have employed to market the car.

State-owned companies in China are normally too arrogant or too shy to deal with media.

But Dongfeng is different. In late July, the day when the Aelus S30 was officially launched into sales, the company convened what looked to me like a gathering of about 100 automotive journalists in a place in suburban Beijing to meet the executives of its passenger vehicle business and test drive the car.

State-owned Chinese companies generally lack talent in their marketing and sales departments, though they are not short of capable engineers and plant managers.

But Dongfeng is very active on the marketing side. Led by Li Chunrong, former vice general manger of Dongfeng Yueda Kia Automobile Co. and now sales chief of its passenger vehicle business, the company is now staging a series of road shows in second-tier Chinese cities which are the target markets of its first sedan.

To be sure, Dongfeng still has a long way to go to build a strong car brand on the highly competitive domestic market. Its executives have also acknowledged the margin of its first car is too thin to make them much money.

But the company has so far made fairly good progress in building and marketing the car—it claims to have sold more than 5,000 Aelus S30s since its launch on July 22.

As part of its relentless marketing campaign, every week Dongfeng's marketing department sends me an unsolicited email saying how well accepted the Aelus S30s is on the market.

Though I am getting tired of reading it, the email often reminds me: how changed an old fashioned state-owned company can be.

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