– by Xiao Fang
Dongfeng Motor Corp. set up a subsidiary, Dongfeng Passenger Vehicle Company (DFPV), in July 2007 devoted to producing Dongfeng brand cars. The company’s first sedan, the Aeolus S30, rolled off the assembly line on June 30, 2009. It sold 5,000 units in the first 40 days since its launch. In a recent media interview Li Chunrong, DFPV vice president, and other key executives talked about the Aeolus S30 and its launch. The following are excerpts of the interview. – Editor
auto.sohu: What is the current production capacity for the Aeolus S30?
Liu Zhonghou (DFPV chief of production): We are now able to produce 200 cars in eight hours, about one every two minutes and 20 seconds. It takes time for our capacity to go up. We need to train workers and staff. Besides, it takes time for our suppliers to catch up.
auto.sohu: In an earlier interview, you said that DFPV would adopt a McDonald’s-style marketing strategy (meaning to have a great number of franchised shops). How big is your sales network going to be?
Li Chunrong: It is easy to set up a 4S store (the “4S” stands for sales, spare parts, services and survey). The crucial element is to have a good product to sell. The next key is to have franchisees that are competent and share our goals. As we adopt a long-term development strategy, we are going to look for franchisees taking a similar approach. We now have 65 4S stores and 199 2nd-tier dealerships. The total is now 264 sales outlets.
auto.sohu: How is the Aeolus S30 accepted in the market?
Li Zheng (DFPV assistant to marketing chief): Thanks to its quality and style, the Aeolus S30 has proved quite popular in Shanghai. Customers in southwest, northwest and north China have a favorable impression of the car, too.
Li Chunrong: If customers in Shanghai have a favorable impression of the car, it will sell well in other parts of the country. The biggest problem at present is unauthorized price hikes. As the Aeolus S30 is currently in short supply, some outlets hike its price, without authorization from us. Customers have complaints about this. We are clamping down this practice and banning sales beyond authorized regions.
auto.sohu: Could you say something about your quality control?
Liu Zhonghou: We do not rely only on technology to ensure the quality of our cars. We emphasize product quality throughout the entire process, from the design stage to manufacturing. Our first focus is design quality. We follow a set of strict standards in conducting dynamic testing. Our test run of the Aeolus S30 is now close to 3 million kilometers. And all kinds of road conditions have been taken into account for the test run. We’ve developed an extremely reliable and steady chassis for the car. We have a quality control system that is based on our 40-plus-year experience in automotive manufacturing. We’ve also incorporated the good experience of Toyota and Ford into this system. We are trying to combine the best of practices in quality control.
We’ve spent four years developing the Aeolus S30. I believe we can spend less time developing our next models.
auto.sohu: Could you brief us on Dongfeng’s procurement system?
Liu Zhonghou: We take product quality as the first criterion for selecting suppliers. Of our suppliers, 85 percent are from leading global manufacturers, 10 percent from Dongfeng’s existing suppliers and 5 percent are new suppliers. The world’s top 10 suppliers have come to us, including Bosch and Siemens.
Li Chunrong: Some first-rate suppliers are willing to cooperate with us because of the Dongfeng brand as well as the fact that DFPV is a member of the Dongfeng family. Suppliers wo’t cooperate with you if you do’t have the capability or future.
auto.sohu: What do you do to build the image of your brand?
Li Chunrong: It is difficult to build your brand image with just a slogan or a concept. You need to have a complete management system from design to production to sales and service. We make sure, for example, to provide aftersales service at the shortest possible notice. When something’s gone wrong with a car on the road, for example, we’ll come to the rescue in the shortest possible time. That is crucial for the customer. For this purpose, we’ve established a call center, which actually opened on March 26. The center has played a role in boosting our sales. We sold 1,700 Aeolus S30s in July and at least 3,000 units in August.
auto.sohu: How do you look at China’s car market?
Li Chunrong: China’s car market is expected to continue growing for the next 15 years. This is because China is fast developing and car ownership is less than one-third of the world’s average. Large-scale urbanization in China is expected to continue unfolding in the next 15 yeas. So long as China does not have to fight a war and enjoys economic stability and development, China’s car market is assured of an annual 6-8 percent growth in years ahead.
auto.sohu: Can you say something about DFPV’s corporate culture?
Li Chunrong: We are able to successfully launch the Aeolus S30 because of three things. The first is Dongfeng’s automotive manufacturing culture built over the past 40 years. The second is corporate honesty. We believe in honesty in doing business. Under no circumstance will we cheat the customer. The third relates to our established system of R&D, manufacturing, marketing and management.
The Aeolus logo was born when Dongfeng was founded. The Aeolus S30 therefore represents our brand of long standing, of 40 years of automotive manufacturing experience and technology.
auto.sohu: How about the engine for the S30?
Liu Zhonghou: We plan to make our own engines that customers can really trust. Our engines are expected to be a bit better than those put into production by Toyota and Honda this year. We will build our own engines in 1-2 years.
Li Chunrong: Our first self-developed engine ignited successfully on October 24 last year. Tests show that this engine reaches all designed parameters. R&D is now underway for another five types of engines at Dongfeng, with a focus on a 1.6-liter engine. Customers can expect to have more engine choices for the Aeolus S30 in the near future.
Rewritten by Raymond Chen based on author’s story on auto.sohu.com