东风汽车集团股份有限公司

Dear Shareholders,

On behalf of the Board of Directors, I hereby present the 2023 annual report of Dongfeng Motor Groupfor your review.

In 2023, facing the complex situation of accelerated market demand differentiation, deepening competition pattern and increasing challenges, the Group adhered to the main line of transformation and development, and made every effort to promote the transformation from relying on joint ventures to equal emphasis on both joint ventures and independent development, and from focus on fuel-powered vehicles to a balance between energy-saving vehicles and new energy vehicles. The progress met the expectations of transformation and further strengthened the foundation for corporate development.

In 2023, approximately 2,088,200 units of vehicles were sold in this period, representing year-on-year decrease of 15.3%; sales of independent brand passenger cars reached 347,400 units, a decrease of 30.2% year-on-year; sales of commercial vehicles reached approximately 343,400 units, an increase of 10.3% year-on-year. The Group's sales of new energy vehicles in this period were approximately 348,000 units, accounting for an increase of 2.7 percentage points in the Group's sales, of which, sales of high-end brand VOYAH exceeded 50,000, an increase of 159.1% year-on-year. Due to the continued decline in market share of non-luxury joint venture passenger cars, the Group's joint venture business achieved sales of 1.3974 million units, of which, Dongfeng Nissan's sales decreased by 21.5% year-on-year and Dongfeng Honda's sales decreased by 8.5% year-on-year. The Group's overseas export business maintained a good growth momentum, with export sales of 169,100 units, an increase of 14.3% year-on-year, achieving the best level in history.

In this period, the Group achieved sales revenue of RMB 99.315 billion, with a net loss attributable to shareholders of listed companies of RMB3.996 billion. As of the end of 2023, the Group has abundant cash reserves, amounting to more than RMB100 billion. The Group continuously optimize asset structure and operational efficiency. The asset-liability ratio for this period was 51.7%, with a stable asset-liability structure. Operating cash flow increased by RMB1.991 billion year-on-year, with an operating cash ratio of 8.61%, steadily increasing operating cash flow.

In the face of a very severe situation, the Group focused on the overall goals of the "14th Five-Year Plan" and the Three-Year Action Plan for "Transition Action of technological innovation", and deepened reform and innovation, accelerating the pace of transformation and upgrading in new energy. We comprehensively completed the layout of new energy brands, platforms, products, and core resources, achieving new development in fields such as independent new energy vehicles, control of key core technologies, and deepening reforms, and forming a strategic layout that is significantly better than the era of traditional fuel vehicles.

The Group established comprehensive brand layout. In the luxury car market, we have positioned ourselves in the luxury electric off-road brand Dongfeng M HERO, and the first product, M HERO 917, achieved a transaction price of around RMB700,000 and has sold over a thousand units since its launch in September last year. In the high-end car market, Dongfeng VOYAH has completed three rounds of product iteration, with a transaction price of around RMB300,000, and sales volume in 2023 have exceeded 50,000 units. For the mainstream consumer market, Dongfeng eπ's first model, eπ007, was put into mass production and launched to market on March 14 this year. In the entry-level market, the first model of Dongfeng Nammi, the Nammi 01, started deliveries in January this year.

Through continuous innovation, we provided strong support for the transformation of new energy. We have built three major platforms for independent passenger cars: the M TECH Luxury Offroad Architecture, the Dongfeng Quantum Architecture, and the DSMA energy-saving Architecture. In the fields of green energy and intelligence, we have independently mastered technologies and resources such as the "three core e-components", electronic and electrical architecture, automotive-grade chips, independent controllers, intelligent driving, and fuel cells. We have increased our investment in technology, and the number of new invention patents authorized by the Company remains the highest in the industry.

Committed to promoting institutional and mechanism reforms that are in line with our transformation and upgrading. We have been accelerating the implementation of the three-year transformation and upgrading plan, unwaveringly strengthening and optimizing Dongfeng's independent business and new energy vehicles. We have carried out the “PV Transition Action” to manage the three major brands of Dongfeng Fengshen, Dongfeng eπ, and Dongfeng Nammi in an integrated manner, and pool the resources of the Group to develop the independent new energy passenger vehicle business. We have implemented the “R&D Transition Action” and established a research and development institute to build a "1+n" research and development system, focusing on the transformation and upgrading of new energy, deeply integrating the group's research and development system and resources, and comprehensively enhancing research and development efficiency. Furthermore, we have implemented the "CV Transition Action" for Dongfeng's commercial vehicle business and established a commercial vehicle business unit to operate the commercial vehicle business in an integrated manner across the Group, concentrate superior resources, help boost the commercial vehicle business to fully compete in the new energy era, and create a world-class commercial vehicle enterprise.

The implementation of these measures has achieved significant progress. From January to February this year, the Group sold 331,000 units of vehicles, an increase of 26.2%, achieving a "good start". Looking ahead, the Group will anchor the goals and tasks of the new mid-term business plan. We will strengthen our mission of "striving for first place and being a good national team", and make every effort to achieve transformation and breakthroughs, surpassing and leaping forward, and promoting new and greater progress in the Company's operations, in order to assist all shareholders in achieving value appreciation.

Finally, on behalf of the board of directors, I would like to express my sincere gratitude to all shareholders for their continued support and contribution.

Yang Qing

Wuhan, the PRC

28 March 2024