CARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLE

HK000KL3_Short- 1 -

CARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLECARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLECARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLECARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLE

DONGFENG MOTOR GROUP CO.,LTD

Nov. 22, 2006Wuhan

HK000KL3_Short- 2 -

Table of Contents Table of Contents

Brief Overview of DFGBrief Overview of DFG

Brief Overview of DPCABrief Overview of DPCA

Brief Overview of DHACBrief Overview of DHAC

Current Operation Situation of DFGCurrent Operation Situation of DFG

HK000KL3_Short- 3 -

Group StructureGroup Structure

Dongfeng Motor Group（ the Company ）

Subsidiaries Sino-foreign JVsOther companies in which

the Company has directequity interests

Dongfeng(Shiyan) Special Purpose

Commercial Vehicle Co.,

China Dongfeng MotorIndustry Import&Export

Co., Ltd

Dongfeng Motor Tender Info. Co., Ltd

Dongfeng Motor Co.,Dongfeng Honda

Engine

Dongfeng HondaDongfeng Honda

Auto Parts

Dongfeng Nissan Diesel

Dongfeng MotorFinance Co., Ltd

Dongfeng SUV Co., Ltd

Dongfeng ElectricalMotor Joint Stock

Dongfeng PeugeotCitroen Co., Ltd

Honda Auto(China) Co., Ltd

50% 50%

50%

44%

Dongfeng Motor Corporation

Public Shareholders

66.68%

33.32%

96%

95%

35.2%

50%

50%

20%

10%

40%

36.44%

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Production Capacity

Unit: 0,000

Product Line

Major JVs Foreign Partner

Dongfeng Peugeot Citroen

PV ： 22

Dongfeng Honda Automobile

PV ： 12

Dongfeng Honda Engine

Engine ：32

Dongfeng Motor Co. Ltd

CV ：PV ：

3228.5

(1)

1 ） Nissan Diesel included

Brief Overview of DFGBrief Overview of DFG

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Xinjiang Auto

Liuzhou Auto

Shanghai

Hangzhou

Dongfeng Honda Auto Parts

Shiyan BaseXiangfan Base

Wuhan Base

Guangzhou Base

Layout of Major Production Facility

Four Major Production Facilities

Shiyan Base: CV, Auto Parts , Auto Manufacturing Equipments

Wuhan Base: Headquarter, PV

Xiangfan Base: LCV, Engines, PV

Guangzhou Base: PV, Engines, Auto Parts and Components

HK000KL3_Short- 6 -


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

capacity expansion project broke ground.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.

Dual-brand strategy

Course of Development

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Dual brands and a broad product line

Advanced technology

Strong R&D capability

Fine product quality

Leading-edge technology and safety

Platform-sharing strategy

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

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

3 ） Designed shared auto parts rate exceeding 60% - largely reduced manufacturing cost

Company advantages

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2005 production:141,6612005 Sales: 140,399

YoY growth: 60.92% and 57.52%

Operation Performance

114040 165453 141661206762

0

50000

100000

150000

200000

250000

2005年1-10月 2006年1-10月 2005年 2006年预测

83670

32984

96233

64342

100011

40388

125000

83015

0

50000

100000

150000

200000

250000

2005年1-10月 2006年1-10月 2005年 2006年预测

DCAD DPAD

3.79%4.39% 4.83% 4.95%

0%

2%

4%

6%

8%

2004年 2005年 2006年1-9月 2006年预测

Operation situation from 95-2002

Operation situation from 95-2002

Operation situation from January – October 2006Operation situation from January – October 2006

Sales from January – October 2006Sales from January – October 2006Market shareMarket share

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Brief Overview of Dongfeng Honda Automobile Co., Ltd


Time of Establishment ： July 16th, 2003

Equity Stake ： DFM :HM :HMCI （ 50%:40%:10%)

Registered Capital ： 200 mn USD

Production Capacity ： 120,000 units/year

Current Models ： CR- V CIVIC

Staff number ： 2526 persons （ by the end of September 2006 ） Time of Production ： February 2004

Land Area ： 690,478 ㎡ Corporate Culture ： Continuously expand business scale and strive to achieve business

target Strive to improve customer satisfaction Further improve corporate governance and closely cooperate for

mutual development

Course of Development

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1st stage construction

2nd stage costruction +

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 the market for its superb power

and fuel efficiency.

CRV

CRV CIVIC

Products Briefing




11,931

25,645

51,887

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

55000

60000

2004年 2005年 2006 1-10月

53.48%53.48%

Operation performance

Production volume

Production volume Sales revenuerSales revenuer

47071

10,472 26,2445,000

20,000

35,000

50,000

2004年 2005年 06 1-10年月

Sales volume

Sales volume

150.6%150.6%

43.6%

649,949

494,999

203,212

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2004年 2005年 2006 1-10年月


Current operation for DFGCurrent operation for DFG

Aggregate sales: 595,000 units

PV: 385,000 units ， YoY growth34.78%

High than industry average:31.68%

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.

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

Sales revenue YoY growth 9.8%

Net profit YoY growth 68.75%

Gross profit YoY growth 47.65%

ROE YoY growth 7.2%

Remarkable market performance Remarkable market performance PV growth higher than industry PV growth higher than industry average in first 10 monthsaverage in first 10 months

Improved financial performance Improved financial performance 1-6 20061-6 2006

TTurning Around of DPCA, with urning Around of DPCA, with Remarkably Improved OperationRemarkably Improved Operation

Major performance in first 19 months


384782

285486

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2005,1-10 2006,1-10

Sales of PV-Sales of PV- Dongfeng Honda AutomobileDongfeng Honda Automobile

Sales of PV- Dongfeng Sales of PV- Dongfeng Peugeot CitroënPeugeot Citroën

Sales of PVSales of PV －－ Dongfeng Motor Co. LtdDongfeng Motor Co. Ltd Total sales of PV - Dongfeng Motor GroupTotal sales of PV - Dongfeng Motor Group

20,839

0

15,000

30,000

2005,1-10 2006,1-10

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

Each JV strategically launched competitive new models directed at each sub-segment, Each JV strategically launched competitive new models directed at each sub-segment, which fastly pushed forward the Group’s PV industry.which fastly pushed forward the Group’s PV industry.

Well Positioned PV Business Entered a Fast Development Stage

Well Positioned PV Business Entered a Fast Development Stage

147,993

050,000

100,000150,000

2005,1-10 2006,1-10

Growth rate:

19.7%

Growth rate:

125%

Unit:,000

Unit:,000

116,654160,575

0

100,000

200,000

2005,1-10 2006,1-10

Growth rate:

37.65%

Unit: ,000

PSA Peugeot Citroën

Growth rate:

34.75%

,ooo unitsIndustry YoY growth rate ：34.75%

47,071

177,136


Steady Revenue GrowthSteady Revenue Growth

SSales Revenueales Revenue

23,282

21,192

20,000

20,500

21,000

21,500

22,000

22,500

23,000

23,500

1H2005 1H2006

9.9%

RMB million

Composition of RevenueComposition of Revenue

35%28%

61% 70%

4% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1H2005 1H2006

CV PV Others

Rapid sales growth as well as a steady pricing policy guaranteed a continuous and Rapid sales growth as well as a steady pricing policy guaranteed a continuous and steady growth of the Group’s sales revenuesteady growth of the Group’s sales revenue


Continuous Growth of Gross Profit Continuous Growth of Gross Profit

2,7663,330

4,084

13.1%

16.2%17.5%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 1H 2005 2H 2006 1H

0%

4%

8%

12%

16%

20%

Gross profit Gross profit margin

DDFG’s Overall Gross Profit and Gross Profit MarginFG’s Overall Gross Profit and Gross Profit Margin

14.0% 10.3% 13.0%

0.0%10.0%20.0%

2005 1H 2005 2H 2006 1H

12.9% 18.2% 19.6%

0.0%10.0%20.0%

2005 1H 2005 2H 2006 1H

CV Gross Profit MarginCV Gross Profit Margin

PV Gross Profit MarginPV Gross Profit Margin

RMB million

Significant growth of the Group’s PV gross profit and gross profit margin guarantees the Significant growth of the Group’s PV gross profit and gross profit margin guarantees the steady increase of the Group’s gross profit marginsteady increase of the Group’s gross profit margin


Robust Profit GrowthRobust Profit Growth

660

940

1,114

0

300

600

900

1,200

1,500

Net Profit

DDFG’s Total Net ProfitFG’s Total Net ProfitSales GrowthSales Growth

RMB Million

Fast growth of PV sales volume and steady pricing policy guaranteed a continuously Fast growth of PV sales volume and steady pricing policy guaranteed a continuously steady growth of the Group’s sales revenuesteady growth of the Group’s sales revenue

164 187233

141 103

125

0

50

100

150

200

250

300

350

2005 1H 2005 2H 2006 1H

PV CV

000’ units


Continuous Improvement of Operational Efficiency

Continuous Improvement of Operational Efficiency

16.72%

15.18%15.40%

14.00%14.50%

15.00%15.50%16.00%

16.50%17.00%

2005 1H 2005 2H 2006 1H

Improvement of operation efficiency led to steady growth of the Group’s ROA and ROEImprovement of operation efficiency led to steady growth of the Group’s ROA and ROE

NNet Profit Marginet Profit Margin Return on EquityReturn on Equity

4.80%

3.10%

4.60%

0.00%1.00%

2.00%3.00%4.00%

5.00%6.00%

2005 1H 2005 2H 2006 1H


Prospect of PRC Auto Industry in 2H 2006

Prospect of PRC Auto Industry in 2H 2006

At the beginning of 2006, estimated annual sales growth of China’s automobile industry by CAAMAt the beginning of 2006, estimated annual sales growth of China’s automobile industry by CAAM was 13% , 13% ,

13%

000’ units

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

6,500

5,758

5,200

5,400

5,600

5,800

6,000

6,200

6,400

6,600

2005A 2006E


2. Outlook of DFG 2. Outlook of DFG

SSpecific Measurespecific 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.

Commercial Vehicles ： Strengthen marketing of newly launched

products Safeguard competitiveness of old products Promote export and expand overseas market

share

SSales Planningales Planning

230200

70

250

0

50

100

150

200

250

300

DFL-PV DPCA DHAC CV


`̀

Thanks!

CARE FOR EVERY CONSUMER, CARE FOR EVERY VEHICLE

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