Dongfeng's Aeolus Off to Strong Start

The State-owned Car Company Is a Savvy Marketer, Says Yang Jian at Auto News China

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SHANGHAI (AdAgeChina.com) -- Though I stick to the view that Dongfeng Motor Corp. should concentrate on its commercial vehicle business, 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, following Shanghai Automotive Industry Corp. (SAIC) and China FAW Group Corp.
Yang Jian
Yang Jian
But one thing that sets Dongfeng apart from other state-owned automakers is its down to earth approach towards 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 plans to acquire the Volvo car brand, citing high risks associated with overseas acquisitions.

The company's first own brand car, the Aeolus 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.
Dongfeng's new Aeolus model
Dongfeng's new Aeolus model
The Aeolus is fitted with engines supplied by Dongfeng Peugeot Citroen, the Chinese company's joint venture with PSA Peugeot Citroen.

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 RMB 75,800-99,800 ($11,098 to $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 the Aeolus S30 was officially launched, the company convened a gathering of about 100 automotive journalists 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, a former manager of Dongfeng Yueda Kia Automobile Co. and now sales chief of its passenger vehicle business, the company is now doing 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 in the highly competitive domestic market. Dongfeng's executives have also acknowledged the car's margins are too thin to make them much money.

But the company has made fairly good progress in building and marketing the car, andclaims to have sold more than 5,000 Aeolus S30s since July 22.

As part of its relentless marketing campaign, every week Dongfeng's marketing department sends me an unsolicited e-mail saying how well-accepted the Aeolus S30s is on the market. Though I am getting tired of reading it, the e-mail often reminds me how much an old-fashioned state-owned company can change.

Yang Jian is the managing editor of Automotive News China, part of Crain Communications, which is also the parent of the Ad Age Group.


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