Dongfeng Motor Group, one of China's leading automakers, has decided to acquire the passenger vehicle operations from its parent company, Dongfeng Motor Corporation, for 797.1 million yuan (US$ 116.9 million).

Dongfeng Motor said it expects to launch its first own-brand passenger car, a 1.6L Fengshen S30, later 2009. This car will sell for 100,000 yuan.

The company also plans to use the own-brand operation as a platform to develop its new-energy vehicles business. Dongfeng Motor Corporation, which currently holds about 66.9% stake in this subsidiary, will sell off its assets including the production-line equipment and logistics and warehouse facilities as part of the impending deal.

Dongfeng Motor already makes and markets commercial vehicles under its own brand, but until now, its passenger cars have been produced through joint ventures with foreign automakers, including PSA Peugeot Citroen Group, Honda Motor Co and Nissan Motor Co.