Dongfeng Motor has received 32 million subsidies from Xiangfan government

It is reported that on October 9, Dongfeng Motor received RMB 32 million subsidy for the Dongfeng New Energy City Bus Technology Development Project allocated by the Finance Bureau of Xiangyang City, Hubei Province.

Dongfeng said that according to the “Implementation Plan” of the project, the motor companies and battery companies in the project joint unit will allocate 20% of 32 million yuan, and the remaining 80% will be issued by the Ministry of Finance, the Ministry of Industry and Information Technology, and the Ministry of Science and Technology. The relevant provisions of the Interim Measures for Assessment Management of New Energy Automobile Industry Technology Innovation Project (Caijian [2013] No. 458) and the “Accounting Standards for Business Enterprises” are included in “other payables”.

Some analysts pointed out to NetEase.com that Dongfeng Motor, as the “leading enterprise” in Xiangfan City, Hubei Province, has had unsatisfactory performance in recent years, and its net profit has declined for three consecutive years. "The government of Xiangfan City undoubtedly transferred blood from the government to Dongfeng Motor."

Dongfeng Motor's annual report for the past two years shows that its 2011 and 2012 net profits were 464 million yuan and 21,734,200 yuan, respectively, year-on-year decrease of 18.69% and 94.82%. In the first half of this year, the performance of Dongfeng Enterprises continued to decline, with a net profit of 43.185 million yuan, a decrease of 54.86% year-on-year.

In addition, the Xiangfan City government subsidy Dongfeng Motor’s project is the “Dongfeng New Energy City Bus Technology Development Project.” In recent years, Dongfeng Motor’s bus and site sales have been unsatisfactory. The data shows that it sold just over 30,000 vehicles last year. In the first half of this year, sales were also around 16,000.