Dana Corporation and Dongfeng Motor Co., Ltd. Sign Joint-Venture Agreement to Produce Commercial Vehicle Axles in China

Toledo, Ohio -- Mar 10, 2005 -- Dana Corporation (NYSE: DCN) and Dongfeng Motor Co. Ltd. today signed an agreement to form a joint-venture company to develop and produce commercial vehicle axles in China.  The 50/50 joint venture will be called Dongfeng Dana Axle Co. Ltd.  Driveshafts and other products for commercial vehicles may be added to the joint venture following its establishment.

The signing ceremony took place in Xiangfan with local and regional government and business development officials in attendance.  The joint venture is expected to be finalized in the third quarter following customary government approvals and the completion of other necessary conditions.

Dana will invest in an existing Dongfeng subsidiary, which is China’s largest commercial vehicle axle manufacturer, to form Dongfeng Dana Axle.  Dana’s net investment at the time of closing is expected to be approximately US$60 million.  Headquartered in Xiangfan, China, the joint-venture company will employ approximately 8,000 employees in three production facilities in Xiangfan and Shiyan, as well as a research and development center that will be established in Wuhan.   The technical center will support Dongfeng Dana Axle’s commitment to providing its customers with world-class manufacturing processes and axle components and systems. 

“We are pleased to reach this milestone with Dongfeng,” said Dana Chairman and CEO Mike Burns.  “This Chinese joint venture will continue to supply the axle needs of Dongfeng Motors while serving as a world-class, globally competitive medium- and heavy-axle supply base for Dongfeng and Dana.”

“The leadership, product expertise, commitment to new technology, and people of Dana and Dongfeng make this an exciting opportunity for both companies,” said Dongfeng Motor Co. Chairman and CEO Miao Wei.   “Most importantly, Dongfeng Dana Axle will benefit our customer base.”

Dongfeng Motor Co. President Katumi Nakamura added, “Dana’s management practices and experience in the global vehicular market will help Dongfeng Dana Axle be a model for progress for the Dongfeng Components Group in the international markets.”

Dongfeng Dana Axle will continue to primarily supply Dongfeng Motor, which itself is one of the world's largest truck producers, while also expanding its product offerings and customer base predominantly in the Chinese market.  Annualized sales for the joint venture company in 2005 are expected to be approximately US$400 million.

“Dongfeng Dana Axle will be the largest commercial vehicle axle supplier in Asia,” said Nick Cole, president of Dana’s Heavy Vehicle Technologies and Systems Group.  “For Dana’s Commercial Vehicle Systems business, this joint venture also provides a great opportunity to balance our extensive operations in North America.”

About Dongfeng Motor Co. Ltd.

Dongfeng Motor Co. Ltd. is a joint venture between the state owned Dongfeng Motor Group Company Ltd. and a Chinese subsidiary of Nissan Motors.   Dongfeng Motor Group was founded in 1969 and with its affiliates ranks as one of the three largest vehicle makers in China.  The Group employs more than 112,000 people and reported sales of more than US$9.5 billion in 2003.  Dongfeng Motor Co. Ltd. produces a broad range of light-, medium-, and heavy-duty trucks, as well as buses and passenger cars.

About Dana Corporation

Dana people design and manufacture products for virtually every major vehicle producer in the world.  Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles every year.  A leading supplier of axle, driveshaft, engine, frame, chassis, and transmission technologies, Dana employs 46,000 people in 28 countries.  The company is based in Toledo, Ohio, and reported sales of $9.1 billion in 2004.  Dana’s Internet address is: www.dana.com.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements represent Dana’s expectations based on our current information and assumptions.  Forward-looking statements are inherently subject to risks and uncertainties.  Dana’s actual results could differ materially from those that are anticipated or projected due to a number of factors.  These factors include national and international economic conditions; the strength of other currencies relative to the U.S. dollar; our ability to complete the formation of the Dongfeng Dana Axle Co. Ltd. joint venture as contemplated and the ability of the joint venture to achieve its projected sales in 2005;and other factors set out in our public filings with the Securities and Exchange Commission.   Dana does not undertake to update any forward-looking statements in this document.

 

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