Is Any Auto Manufacturer Worth Owning These Days? Investors Might Want to Look at China’s Dongfeng
Submitted by EnergyTechStocks.com
Can’t bear to read another headline about plunging new-car sales? Convinced that as long as gasoline costs, at a minimum, $4 a gallon, no car company in the world has the right stuff?
Well, here’s a name you might not have heard of that may be worth a closer look – Dongfeng Motor Group. It’s a Chinese company, which only makes sense, given that China is the one car market still putting up big year-over-year gains. As EnergyTechStocks.com reported last week, China car sales were up 17% in the first five months of this year. For the full year, sales are expected to be 14% higher than in 2007, totaling more than 10 million vehicles. (For more see Most Important Oil News This Past Week has Gone Unreported in U.S. - China Car Sales Up 17.4%)
As good as China’s overall car sales have been, Shanghai-based Dongfeng’s sales have been even better, the company reportedly selling 28% more vehicles in the first five months of 2008 compared with the year-earleir period. Dongfeng, which trades in Hong Kong, reportedly is China’s third-largest automaker. One look at the company’s strategic partnerships suggests that, as China’s still nascent car market continues to grow, Dongfeng looks positioned to grow along with it.
Dongfeng has ventures with Honda, Nissan and PSA Peugeot-Citroen. The first two reportedly contributed year-over-year sales gains of 63% and 31% in the first five months of 2008. The company recently said it expects to grow – a lot – over the next five years, as it introduces at least 15 new models. Sales will reach one million vehicles before 2012, compared with 610,000 in 2007, the company said.
Of course, by 2012 the car industry will likely look very different than it does with today, with new outfits skilled at producing plug-in and all-electric vehicles challenging for market share. Still, as befitting a country with a rapidly emerging middle class, it seems likely China car sales should keep rising sharply.
