Nissan, Dongfeng Joint Venture Talks Delayed again

Home>>Business

Last updated at: (Beijing Time) Monday, August 19, 2002

Nissan, Dongfeng Joint Venture Talks Delayed again

DISCUSSION

CHINESE

SEND TO FRIEND

Joint venture talks between China's second largest vehicle manufacturer Dongfeng Automobile Co. and Japan's auto maker Nissan have been postponed yet again to give Dongfeng more time to cope with 30,000 lay-offs.

The negotiations formerly set for June were postponed to the middle of July, and were later put back again. The new date has yet to be decided.

The proposed joint venture is generally expected to advantage both parties. It is an important part of Nissan's "Revival Plan," which aims to expand the company's penetration of China's huge auto market.

The joint company, hopefully to be established by the end of this year in Shiyan, Hubei Province, with Dongfeng and Nissan having equal shares, will be in production of a minibus and three passenger cars -- the Cefiro, the Sunny and the March. Production is expected to reach 150,000 units in three years.

An overburdened state-owned factory established in 1969, Dongfeng, famous for its best-selling heavy trucks and Fukang-Citroen sedans, has to undergo complete reorganization to become part of the 3 billion-yuan joint venture.

The toughest problem is to cut the jobs of 30,000 people, one-third of whom will be left to find new employment themselves.

In order to help reduce Dongfeng's social burden, the Shiyan city government has signed a 1.8-billion-yuan agreement to take over some 300 service firms employing 13,000 and affiliated to Dongfeng. As an old state-owned enterprise set up in the time of the planned economy, Dongfeng has had many social functions. Its service firms range from kindergartens and locksmiths to street cleaning.

Miao Yu, general manager of Dongfeng, told Xinhua that the company has planned to open more sales outlets and encourage the re-employment of laid-off workers in the auto sales and service sectors.

Dongfeng's production and assembly factories are mostly based in Shiyan and Xiangfan cities both landlocked in the mountainous west of central China's Hubei Province, where road infrastructure is outdated.

Nissan wants its proposed Chinese partner to have clear solutions to its problems before the final talks are held.

Zhao Bin, mayor of Shiyan, pledged that the municipal government will give strong support to improving the standard of the urban infrastructure and the environment to enhance the joint venture deal.

He said in an interview with Xinhua that a highway linking Shiyan with Wuhan, the provincial capital and the hub of transportation in central China, will be opened by the end of 2004.Road traffic conditions, housing and entertainment facilities in Shiyan will be much improved as well.

Source: Xinhua News Agency

Questions?Comments? Click here

Commentary: Taiwan Independence No Easy Thing ( 13 Messages)

FM Spokesman Rejects Al-Qaida Contacts Allegation ( 9 Messages)

China's Exports Hit Record of US$56.2 Billion in July ( 10 Messages)

Fourth Unmanned Spaceship Set to Roar by Yearend ( 10 Messages)

China's On-going Reform Calls for Better Economic Illumination ( 2 Messages)