Dongfeng Motor : CONTINUING CONNECTED TRANSACTIONS-REVISED ANNUAL CAPS UNDER THE FINANCIAL SERVICES MASTER AGREEMENT

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DONGFENG MOTOR GROUP COMPANY LIMITED*

東風汽車集團股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 489)

CONTINUING CONNECTED TRANSACTIONS REVISED ANNUAL CAPS UNDER THE FINANCIAL SERVICES MASTER AGREEMENT

A reference is made to the Continuing Connected Transaction Announcements.

On 28 March 2017, the Company and DFM agreed to revise the Annual Caps in respect of the continuing connected transactions contemplated under the Financial Services Master Agreement as follows:

Original Annual Caps

Amount	For the financial year ending 31 December
	2017	2018	2019
RMB million	800	1,200	1,500
(approximately HKD million)	898	1,348	1,685

Revised Annual Caps

Amount	For the financial year ending 31 December
	2017	2018	2019
RMB million	1,500	2,500	3,000
(approximately HKD million)	1,684.5	2,807.5	3,369

Pursuant to Rule 14A.54 of the Listing Rules, as the Annual Caps have been revised, the Company is required to re-comply with the reporting and announcement requirements under the Listing Rules.

As the parent of the Company, DFM holds, directly and indirectly, approximately 68%（as at 31 December 2016）in aggregate of equity interest in the Company, DFM is a connected person of the Company under the Listing Rules. Therefore the revision to the Annual Caps under the Financial Services Master Agreement constitutes a continuing connected transaction under the Listing Rules.

As certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules exceed 0.1% but are less than 5%, the revision to the Annual Caps under the Financial Services Master Agreement is subject to the reporting and announcement requirements set out in Rules 14A.35, 14A.49, 14A.68 and 14A.71 of the Listing Rules, and is exempt from the circular (including independent financial advice) and the independent shareholders' approval requirements of Chapter 14A of the Listing Rules.

BACKGROUND

References is made to (i) the continuing connected transaction announcement of Dongfeng Motor Group Company Limited (the "Company") dated 28 December 2016; and (ii) the clarification announcement of the Company dated 30 December 2016 (together, the "Continuing Connected Transaction Announcements"). Unless the context requires otherwise, the capitalised terms used herein shall have the same meanings as defined in the Continuing Connected Transaction Announcements.

On 28 December 2016, the Company and DFM entered into the Financial Services Master Agreement, the principal terms of which are set out in the Continuing Connected Transaction Announcements.

REVISION OF ANNUAL CAPS

The Annual Caps in respect of the continuing connected transactions contemplated under the Financial Services Master Agreement are revised (the "Revised Annual Caps") as follows:

Original Annual Caps

Amount	For the financial year ending 31 December
	2017	2018	2019
RMB million	800	1,200	1,500
(approximately HKD million)	898	1,348	1,685

Revised Annual Caps

Amount	For the financial year ending 31 December
	2017	2018	2019
RMB million	1,500	2,500	3,000
(approximately HKD million)	1,684.5	2,807.5	3,369

Historical Transaction Amounts

The historical cumulative transaction amounts in relation to provision of financial services by the Company Group to DFM and its subsidiaries are as follows:

Amount (not audited)	For the financial year ending 31 December			For the two months ended 28 February 2017
	2014	2015	2016
RMB million	217	210	612	741.48

Reasons for and Benefits of the Revision of Annual Caps

The revision to the Annual Caps is determined by the Company with reference to the following factors:

1. there is a growth of financial services functions of the Company Group;

2. in order to satisfy the regulation requirement issued by the PRC authorities in relation to the centralised fund management and the internal demand, most of the financial services required by DFM and its subsidiaries have been centralised to be provided by Dongfeng Finance, which has significantly increased DFM's demand for financial services from the Company Group; and

The Revised Annual Caps have been determined based on the estimated financial services demands of DFM and its subsidiaries.

Taking into account the factors mentioned above, the Directors (including the independent non-executive Directors) consider that the continuing connected transactions contemplated under the Financial Services Master Agreement are on normal commercial terms or better and in the ordinary and usual course of business of the Company Group, and the terms (including but not limited to the revision of the Annual Caps) are fair and reasonable and in the interests of the Company and its shareholders as a whole. The Directors (including the independent non-executive Directors) are also of the opinion that the revision to the Annual Caps is fair and reasonable and in the interests of the Company and its shareholders as a whole.

LISTING RULES IMPLICATIONS

Pursuant to Rule 14A.54 of the Listing Rules, as the Annual Caps have been revised, the Company is required to re-comply with the reporting and announcement requirements under the Listing Rules.

As the parent of the Company, DFM holds, directly and indirectly, approximately 68%

（as at 31 December 2016） in aggregate of equity interest in the Company, DFM is a

connected person of the Company under the Listing Rules. Therefore the revision to the Annual Caps contemplated under the Financial Services Master Agreement constitutes a continuing connected transaction under the Listing Rules.

As certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules exceed 0.1% but are less than 5%, the revision to the Annual Caps under the Financial Services Master Agreement is subject to the reporting and announcement requirements set out in Rules 14A.35, 14A.49, 14A.68 and 14A.71 of the Listing Rules, and is exempt from the circular (including independent financial advice) and the independent shareholders' approval requirements of Chapter 14A of the Listing Rules.

None of the Directors has a material interest in the transactions contemplated under the Financial Services Master Agreement and has abstained from voting on the Board resolutions to approve the transactions contemplated under the Financial Services Master Agreement and the proposed Revised Annual Caps thereof.

INFORMATION RELATING TO THE PARTIES

The Company Group is principally engaged in the manufacture of commercial vehicles (including trucks and buses), passenger vehicles (including basic passenger cars, MPVs and SUVs), engines and other auto parts. The Company Group is also engaged in other automotive-related businesses including vehicle and vehicle manufacturing equipment import/export businesses and the manufacture of vehicle manufacturing equipment, finance businesses, insurance agency businesses and used car businesses.

DFM is the parent company of the Company and it is principally engaged in the manufacture and supply of commercial vehicles, passenger vehicles as well as ancillary services and products.

By order of the Board

ZHU YANFENG

Wuhan, the PRC, 28 March 2017

Chairman

As at the date of this announcement, Mr. Zhu Yanfeng and Mr. Li Shaozhu are the executive directors of the Company, Mr. Tong Dongcheng, Mr. Ouyang Jie and Mr. Liu Weidong are the non-executive directors of the Company and Mr. Ma Zhigeng, Mr. Zhang Xiaotie, Mr. Cao Xinghe and Mr. Chen Yunfei are the independent non-executive directors of the Company.

* For identification purposes only