Japanese carmaker Daihatsu Motor is to supply fuel-efficient engines to Dongfeng Motor. China’s second-largest state-run carmaker apparently wants to use the engines to capture demand for subcompacts that meet coming exhaust regulations.
This will be the first time for Daihatsu, a Toyota Group company, to supply engines to a carmaker outside the Toyota family. Under the plan, Daihatsu will supply about 50,000 engines from its Indonesian plant to the Chinese automaker, based in Hubei Province, sometime this year.
Daihatsu and Dongfeng are in final negotiations, the sources said. Daihatsu is expected to provide 1,000 cc or so engines for Dongfeng’s DFSK subcompact, according to the sources. The cars are expected to get more than 20 km to a liter of gasoline.
The Chinese government plans to raise fuel-efficiency standards for passenger cars to the same levels as in Japan and European countries by 2020. As such, major Chinese carmakers are moving to buy fuel-efficient engines from more technologically advanced foreign automakers.
This will be the second time for Daihatsu to send engines from its Indonesian plant to a Chinese automaker. It already has a contract to supply about 100,000 engines a year to the FAW Group, China’s largest state-owned automaker, based in Jilin Province. FAW is a Toyota partner.
Daihatsu also supplies subcompacts to Toyota in Indonesia. Even though Dongfeng competes against Toyota, Daihatsu wants to boost output at its Indonesian plant, which Daihatsu thinks will benefit the Toyota Group as a whole.
In addition, Daihatsu is negotiating to supply engines to Beijing-based carmaker BAIC Group, according to the sources. BAIC has a close relationship with German automaker Daimler AG.
Since I own both a Dongfeng and a Daihatsu, I think I should be eligible for some sort of an award!
