CARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLE

DONGFENG MOTOR GROUP CO.,LTD

Nov. 22, 2006

Wuhan
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Table of Contents
Brief Overview of DFG
Brief Overview of DPCA

Brief Overview of DHAC

Current Operation Situation of DFG

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Group Structure
Dongfeng Motor Corporation
66.68%
Dongfeng Motor Group 33.32%
the Company

Subsidiaries

96%

95%

35.2%

Sino-foreign JVs

Other companies in which

the Company has direct
equity interests

Dongfeng(Shiyan)
Special Purpose
Commercial Vehicle Co.,

Dongfeng Motor Co.,

50% 50% Dongfeng Honda

Engine

40%

China Dongfeng Motor

Industry Import&Export
Co., Ltd

Dongfeng Honda

50% 44% Dongfeng Honda

Auto Parts

36.44% Dongfeng Electrical

Motor Joint Stock

Dongfeng Motor
Tender Info. Co., Ltd

Dongfeng Nissan 50% 20%

Diesel

Dongfeng Motor
Finance Co., Ltd

Dongfeng Peugeot 50% 10%

Citroen Co., Ltd

Honda Auto
(China) Co., Ltd

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Public Shareholders

Dongfeng SUV
Co., Ltd

Brief Overview of DFG

Major JVs

Foreign
Partner

Production
Capacity
Unit: 0,000
(1)

Dongfeng Motor Co.

Ltd

CV
PV

32
28.5

Dongfeng Honda
Engine

Engine 32

Dongfeng Honda
Automobile

PV

Dongfeng Peugeot
Citroen

PV

12

22

1Nissan Diesel included

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Product
Line

Layout of Major Production Facility

Four Major Production Facilities

Xinjiang Auto

Shiyan Base: CV, Auto Parts , Auto

Manufacturing Equipments

Shiyan Base Xiangfan Base

Shanghai

Wuhan Base

Liuzhou Auto

Xiangfan Base: LCV, Engines, PV

Hangzhou

Guangzhou Base: PV, Engines, Auto Parts

and Components

Dongfeng Honda Auto

Parts

Guangzhou Base

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Wuhan Base: Headquarter, PV

Brief Overview of DPCA

Course of Development

DPCA was first established on May 18th, 1992. Construction established in

two major stages based on an overall planning

First stage investment: RMB13.1bl. Annual production capacity of 150,000

units sedans and 200,000 units engines was formed in the stage

Investment budget for second stage construction is RMB 5bl, forming

annual capacity of 300,000 sedans and 400,000 units of engines

In January 2004, second stage construction for 300,000 units production

capacity expansion project broke ground.

On Oct. 27, 2006, construction for DPCA Second Plant started.

Company staff number: 9,000. Company structure: 9 departments, 2 plants,

2 Brand Commercial Departments.Technical engineers: 700 with an
average age of 35. 83.5% are college graduates.

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Dual-brand strategy

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Brief Overview of DPCA

Company advantages

Dual brands and a broad product line

Advanced technology

Strong R&D capability

Fine product quality

Leading-edge technology and safety

Platform-sharing strategy
1Products technology keep pace with PSA level. Joint development of
products which are more adaptable to local market

2Wider coverage of product line N platform, No.2 platform, No.1 platform

3Designed shared auto parts rate exceeding 60% - largely reduced
manufacturing cost
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Brief Overview of DPCA

Operation Performance
250000

2005 production:141,661
2005 Sales: 140,399
YoY growth: 60.92% and 57.52%

200000
150000
100000

114040

206762

165453

141661

50000
0

DCAD

8%
3.79%
40388

96233
83670

20051-10 20061-10

125000

0%

2006

Sales from January October 2006

2004

2005

20061-9

2006

Market share
-8-

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4.95%

2%

100011

2005

4.83%

4%

100000
50000

4.39%

6%

83015

150000
64342

2006

DPAD

200000

32984

2005

Operation situation from January October 2006

Operation situation from

95-2002
250000

20051-10 20061-10

Brief Overview of Dongfeng Honda Automobile

Co., Ltd
Course of
Development

Time of Establishment July 16th, 2003

Equity Stake DFM :HM :HMCI

Registered Capital 200 mn USD

Production Capacity 120,000 units/year

Current Models CR- V CIVIC

Staff number 2526 personsby the end of September 2006

Time of Production February 2004

Land Area 690,478

Corporate Culture

50%:40%:10%)

Continuously expand business scale and strive to achieve business target

Strive to improve customer satisfaction

Further improve corporate governance- 9and

closely cooperate for mutual
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Brief Overview of Dongfeng Honda Automobile

Co., Ltd
Products Briefing

1st stage construction

CRV

2nd stage costruction

CRV

CIVIC

CR-V: launched in May 2004, two time winner of CCTV Annual SUV
Taking leading position in PRC high-end SUV market ever since its launch
Civic: Launched in April 2006, the first sedan introduced by DHAC. Well
acclaimed by
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the market for its superb

power and fuel efficiency.
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Brief Overview of Dongfeng Honda Automobile

Co., Ltd
50,000
Operation performance

35,000

60000

20,000

55000

51,887

50000
45000

5,000

35000

700,000

30000
25000

26,244
2005

061-10

649,949
Sales volume
494,999

600,000
25,645

500,000

20000

400,000
300,000

11,931

10000
5000

203,212

200,000
100,000

2004

2005

2004

2006 1-10

Production volume

2005

Sales revenuer
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10,472
2004

40000

15000

47071

20061-10

Current operation for DFG

Major performance in first 19
months
PV growth higher than industry average
in first 10 months

Aggregate sales: 595,000 units

PV: 385,000 unitsYoY
growth34.78%
High than industry average:31.68%

Remarkable market performance

Several newly launched models, including new

Dongfeng Nissan Teana, Dongfeng Peugeot 206,
Dongfeng Citroen C-Triomphe and Dongfeng
Honda Civic were well received by the market
and the recently launched Nissan Sylphy also
became a new growth driver for the Group.

Turning Around of DPCA, with

Remarkably Improved Operation

Improved financial performance 1-6

2006
Sales revenue YoY growth 9.8%

In IH2006 sales volume broke through 100,000

units, recording a YoY increase of 38% and a
profit of RMB190 ml, operational level
remarkably improved

Net profit YoY growth 68.75%

Gross profit YoY growth 47.65%
ROE YoY growth 7.2%
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Well Positioned PV Business Entered a Fast

Development Stage
Total sales of PV - Dongfeng Motor Group

Sales of PV Dongfeng Motor Co. Ltd

Unit:,000
150,000
147,993
177,136
100,000
50,000
0
2005,1-10
2006,1-10

,ooo units
450,000 Industry YoY growth rate34.75%
400,000
384782

350,000

Sales of PV- Dongfeng Peugeot Citron

PSA Peugeot Citron

300,000

Unit: ,000
200,000

100,000

160,575
116,654

250,000

285486

200,000

0
2005,1-10

2006,1-10

Sales of PV- Dongfeng Honda Automobile

150,000
100,000

Unit:,000
30,000
15,000

50,000

20,839

47,071

2005,1-10

2005,1-10

2006,1-10

2006,1-10

Each JV strategically launched competitive new models directed at each sub-segment,

which fastly pushed forward the Groups PV industry.
Source: Forcast of China Association of Automobile Manufactures (CAAM)
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Steady Revenue Growth

Sales Revenue

Composition of Revenue
100%

RMB million
23,500

23,282

2%

61%

70%

90%
80%

23,000

70%
22,500
22,000

4%

60%
50%

21,192

40%
21,500

30%

35%
28%

20%

21,000

10%
20,500

0%
1H 2005

20,000
1H 2005

CV

1H 2006

1H 2006
PV

O thers

Rapid sales growth as well as a steady pricing policy guaranteed a continuous and
steady growth of the Groups sales revenue
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Continuous Growth of Gross Profit

PV Gross Profit Margin

DFGs Overall Gross Profit and Gross Profit Margin

RMB million
10,000
9,000

17.5%
16.2%

8,000
7,000
6,000

16%

13.1%

12.9%

18.2%

19.6%

2005 1H

2005 2H

2006 1H

12%

5,000

4,084

4,000
3,000

20.0%
10.0%
0.0%

20%

3,330

8%

CV Gross Profit Margin

2,766

2,000

20.0%
10.0%
0.0%

4%

1,000
0

0%
2005 1H

2005 2H

G ross profit

14.0%

10.3%

13.0%

2005 1H

2005 2H

2006 1H

2006 1H

G ross profit m argin

Significant growth of the Groups PV gross profit and gross profit margin guarantees the
steady increase of the Groups gross profit margin
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Robust Profit Growth

DFGs Total Net Profit

Sales Growth
000 units

RMB Million

350

1,500

300
250

125
141

103

940

200

900

150
100

1,114

1,200

660
233
164

187

600

50

300

0
2005 1H

2005 2H
PV

CV

2006 1H

0
N et P rofit

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Fast growth of PV sales volume and steady pricing policy guaranteed a continuously
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sales revenue

Continuous Improvement of Operational

Efficiency

Return on Equity

Net Profit Margin

6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%

4.60%

17.00%
16.50%
16.00%
15.50%
15.00%
14.50%
14.00%

4.80%

3.10%

2005 1H

2005 2H

16.72%
15.18%

2005 1H

2006 1H

15.40%

2005 2H

2006 1H

Improvement of operation efficiency led to steady growth of the Groups ROA and ROE

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Prospect of PRC Auto Industry in 2H 2006

At the beginning of 2006, estimated annual sales growth of Chinas automobile industry by CAAM
was 13% ,
000 units
6,600

6,500

6,400
6,200
6,000
5,800

5,758

5,600
5,400
5,200
2005A

Source: Forcast of China Association of Automobile Manufactures (CAAM)

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2006E

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2. Outlook of DFG
Sales Planning

Specific Measures

000 units

Passenger Vehicles

In the 2H, Dongfeng Nissan Sylphy,

Geniss and Dongfeng Citroen T21
successively launched to the market.

Further improve localization rate

and reduce cost through
advancement of technology,
management and central
procurement, so as to improve
competitive edge of our products in
the market.

300
250

250

230
200

200
150
100

70

50

0
D F L -P V

D PC A

D HAC

Strengthen marketing of newly

launched products

Safeguard competitiveness of old

products

CV

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Commercial Vehicles

Thanks!
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