In January 2005, Dongfeng Motor Co.,Ltd. (DFL: President & CEO, Katsumi Nakamura) headquartered in Wuhan, Hubei Province, a joint venture between Nissan Motor Co.,Ltd. and Dongfeng Automotive Investment, implemented a cash management system (CMS) to centrally manage the funds of its twenty-nine group companies.
The various divisions at DFL's headquarters and its group subsidiaries had been conducting banking transactions such as establishing accounts, funds settlements and borrowings at their own discretion. As a result, the group as a whole simultaneously had both loans and deposits, making it difficult to improve the efficiency of its cash management. In order to rectify this situation, DFL, under the guidance of Nissan, launched a cash management project in late 2003 resulting in the commencement of a concentrated management of funds of its subsidiaries and completed the implementation of its CMS.
With the implementation of its CMS, DFL is able to centralize all the funds and budget management operations such as deposits, borrowings, credits and payments for its subsidiaries, allowing the subsidiaries to enjoy significant benefits like the elimination of unnecessary bank transactions. With the CMS, DFL will drastically minimize the number of bank accounts it holds and improve management efficiency, and at the same time it will aim to significantly improve the efficient use of funds.
In implementing DFL's CMS, Mizuho Corporate Bank provided comprehensive advice pertaining to cash management operations and system installation. Utilizing the networks of the Industrial and Commercial Bank of China and the China Merchants Bank, the cash management system employed by DFL is now the most advanced system in China, well suited to China's current conditions.
In its Plan 23 (Plan Two Cubed) mid-term business plan rolled out in 2003, DFL sets out targets for improving the quality of its business operations. The implementation of CMS has played an important role in DFL's success in meeting those targets.