At the end of 2010, a subsidiary of Dongfeng Motor Corporation (hereinafter referred to as "Dongfeng Motor") established a joint venture with Jinggang Farm Machinery Co., Ltd. (hereinafter referred to as "Japan Well") in Shenyang. Three years later, Dongfeng Motor decided to expand its cooperation with Japan's Iigna as a group and to build Dongfeng Agricultural Machinery brand.
Before that, there were precedents for auto giants such as Geely Group and Beijing Automotive Group planning to enter the agricultural machinery industry. Industry insiders predict that by 2015, the sales scale of China's agricultural machinery industry will reach 400 billion yuan. Obviously, the cake has attracted the covetedness of the manufacturing giants.
Dongfeng Motor Enters Agricultural Machinery Industry
The day before yesterday, Dongfeng Motor signed the contract for expanding the joint venture with Japan's Iwana Machinery Co., Ltd. for the first time as an automotive group.
Dongfeng Motors stated that the Group will build the agricultural machinery manufacturing industry as a new business platform.
This reporter learned that in 2010, Dongfeng Motor's existing subsidiaries Dongfeng Motor Co., Ltd., Dongfeng Industrial Co., Ltd. and Japan's Jingguan Agricultural Machinery Co., Ltd. jointly invested in the establishment of Japan Jingguan Agricultural Machinery (Hubei) Co., Ltd. (hereinafter referred to as “Dongfeng Wellâ€. "Off", the main production of tractors, combine harvesters, rice transplanters and other advanced agricultural machinery products.
On this basis, on the 20th of this month, Dongfeng Motor signed a joint venture contract with Japan’s Iigna as a group to integrate the resources of the two sides to form a new Dongfeng Iii. The contract stipulates that Dongfeng Motor and Japan’s Jingguan will each hold 50% of the shares and will invest 1.5 billion yuan to import a full range of products such as rice transplanters, harvesters and tractors. Based on this, they will form agricultural special vehicles, agricultural machinery, and professional agricultural machinery. The three core businesses provide mechanized solutions for agriculture.
Dongfeng Motors stated that the cooperation was increased from the original subsidiary to Dongfeng Group’s strategic investment. Japan’s Jingguan said that its agricultural machinery business in China will be fully integrated into the framework of cooperation with Dongfeng, and that the well-holding farm machinery (Changzhou) Co., Ltd., which has operated for 10 years, will also be integrated.
At the signing ceremony, the person in charge of Dongfeng Automobile stated that the new Dongfeng Mine will be built into a large-scale agricultural machinery enterprise group that has annual sales revenue of 15 billion yuan and ranks among the top five in the Chinese agricultural machinery industry. In the future, it will also serve as a new business growth point for Dongfeng Group.
One hundred billion cakes
Why does Dongfeng Motor expand its cooperation and enter the agricultural machinery manufacturing industry as a group?
At the signing ceremony, both sides reached a consensus: With the acceleration of China's industrialization and urbanization, innovation of land circulation patterns, and appropriate scale of land intensive management, the future development of agricultural machinery market is considerable.
indeed so. Recently, Gao Yuan'en, honorary president of the China Association of Agricultural Machinery Industry, said that in light of the existing industry data, if the industry continues to maintain an average annual growth rate of 13%-15%, the sales revenue of the main agricultural machinery business in 2015 is expected to reach 400 billion yuan.
The industry believes that the agricultural machinery industry is in a new round of development opportunities and has attracted the attention of some giants in the industrial manufacturing field. For example, Zoomlion has set up the Agricultural Machinery Division, and Xugong Group has made a prototype. In the field of automobile manufacturing, Dongfeng Motor’s move is not alone. Previously, it was reported that Geely Group and Beijing Automotive Group are planning to enter the agricultural machinery industry.
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