Business overview for FY2012
-The Company announced its year-to-date (YTD) results, covering the period from January through September 2012. Operating revenue for the period was 4.02 billion yuan, an increase of 18% compared to the same period the previous year. The production volume of constant velocity drive-shafts was 8.8 million units, which was a same-period increase of 19%; while the production volume of hook joints was 330K sets, a same-period increase of only 0.4%. The Company forecasts that it will maintain the results it achieved in 2012, namely an operating revenue of 5 billion yuan and a production volume of 12 million constant velocity drive-shafts. The status of the Company’s current construction projects are as follows. The annual production capacity at the Wuhan Plant is forecast to reach 1 million by the end of 2012. In July 2012, the 2nd phase of construction was completed at the Changchun Plant, which has the capacity to produce 75 thousand units. Construction at Wuhan Plant 2 started in August 2012, with the plant building scheduled to be completed in April 2013. In terms of its production status, the Wuhan Plant is supplying products to Zhengzhou Nissan and SAIC-GM-Wuling Automobile, with the Changchun Plant starting to supply FAW VW、Brilliance Auto, and  Shanghai GM Norsom. The Company was recently qualified to supply 23 products to the GM E2XX and other vehicles. And in the area of product quality, the Company was given the Q1 Award from Changan Ford. (From an Oct. 30, 2012 press release)

-The Company announced its business results for the first half of 2012. Sales during the six months totaled 2.72 billion yuan, increasing 18 percent from the same term the previous year. The figure already exceeded half the company’s full-year sales target of 5 billion yuan. In terms of production volume of CV drive shafts, the company’s major products, its production volume stood at 5.71 million units, up 17 percent from that in the same term last year, failing to reach half the targeted volume for the full year of 12 million units. Apart from delays in its construction plans for the Wuhan Plant No.2, the technical center, and laser welding equipment, the company has been moving ahead with its production expansion projects as planned. It its full-year sales target of 5 billion yuan and production targets of 12 million CV driveshafts will remain unchanged. (From a press release July 24, 2012)

-The Company announced its business results for 2011. Sales were 445 million yuan, up 15.6 percent year-on-year, while exports totaled 145.1 million yuan, up 4.2 percent year-on-year. In terms of production volumes, the company manufactured more than 10 million constant velocity joint drive shafts, which was an increase of 13.5 percent from the previous year, and 311,000 sets of hook joints, up 28.8 percent from last year. Its production volume of precision forging components reached 12.48 million units, up 6.2 percent year-on-year. (From a press release, January 13, 2012）

Obtained Supplier Qualification

-The Company announced that its Changchun Plant was designated as an A Class supplier of FAW-VW, after undergoing the automaker’s supplier screening process on December 13 and 14, 2012. The company scored 92 points based on a series of screening for its product quality, processing work, assembly procedures, delivery control and other operations according to the Form-Q (6). (From a press release, December 24, 2012)

-At the beginning of November 2012, the Company received a VDA6.3 screening by VDA-QMC Beijing based on a consignment from BMW. The company has obtained the A-class supplier qualification from BMW by earning 91 points. (From a press release, November 15, 2012)

Supply agreement

-On April 13, 2012, Gu Xiao Feng, Vice President of the Company (SDS), attended a launch meeting for the Gamma SUV project. In 2011, Shanghai GM was ranked number one among Chinese automakers, by selling 1.23 million passenger vehicles in China. In 2012, the automaker is aiming to sell 1.35 million passenger vehicles, of which 1.25 million vehicles will be equipped with parts made by Shanghai GKN Drive Shaft. The Gamma SUV to be sold under the Buick brand is scheduled to go into commercial production in October 2012. By maintaining a harmonious relationship with the automaker, the company is poised to increase business further. (From a press release, April 27, 2012)

Production

-On November 8, 2012, the Shanghai Kangqiao Plant of the Company started operations on its new automated -assembly lines to produce constant velocity joints and drive shafts. The company's first automated line in the Asia Pacific region comprises two 6-legged robots, a servo hydraulic pressure mechanism, and an MES system. By automating some major procedures, such as press fitting and grease fitting, which have been conducted manually so far, the company aims to minimize the adverse effects on product quality caused by human errors. The MES system functions as a monitor to control the assembly process online and a recorder of quality parameters to enable quick feedbacks. Introduction of the robot system led to a headcount reduction, while easing workers' burden. The company is working on switching to the new automated system also on its existing production lines. (From a press release, November 13, 2012)

-On Oct 12, 2012, the Changchun Plant of  the Company produced its millionth driveshaft since launching production, holding a celebration to mark the occasion. Construction of the Changchun plant was started in 2010, with the plant beginning production in 2011 and producing more than 500,000 drive-shafts annually. One and a half years after being built, the daily production volume has been increased from an initial 3,000 daily, to 5,000. Now the plant is making a final effort to produce 1.5 million units by the end of 2012. (From an Oct. 22, 2012 press release) 

-The Company is constructing its third drive shaft production line at its Shanghai Zhoupu Plant. The company is currently producing drive shafts for Shanghai VW’s Tiguan and Q5 on its two existing production lines. The third production line will manufacture mid drive shafts for vehicles built by Nissan, Mazda and Mitsubishi (SUV models). Road test samples will be provided to Mazda and Nissan in October 2012. (From a press release, September 26, 2012)

-The Company held a groundbreaking ceremony for its second plant in Wuhan at the Wuhan Economic & Technological Development Zone on August 27. The total investment in this project is expected to reach 1 billion yuan, of which 380 million yuan will be allocated to the first phase to build two precision forging lines. The facility is expected to be completed in June 2013 with the capacity to manufacture 11 million precision forged parts a year. These products for use in constant velocity drive shafts, will be supplied to customers operating in Central China, Northeast China, and Eastern China. (From a press release, August 29, 2012).

-The Company will establish a second plant in Wuhan. The new facility will be built on approximately 80,000 square meters of land. Construction will be carried out in two phases. The company will invest 230 million yuan in the first phase of the project to construct a 2,000-ton class precision forging line, which will be capable of producing 5.5 million units a year. This production line is scheduled to be completed at the end of December 2012. The plant will eventually have four precision forging lines, functioning as the second largest supply hub for constant velocity 1036joint drive shafts in the Wuhan area. The plant will also supply precision forging products to other plants of the company. (From a press release, March 8, 2012)

- On October 31, 2011, the Shanghai Shenjiang Plant of the Company held a ceremony to celebrate the operation launch of its third precision forging line. The expansion has increased the company’s annual production capacity for forged products to 17 million units. (From a press release, January 4, 2012)

- The Company held a ceremony at its Shanghai Kangqiao Plant to celebrate production of 10 millionth drive shaft for constant velocity joints during 2011 on December 21, 2011. The company has been producing drive　shafts for constant velocity joints in Shanghai, Changchun, Chongqing and Wuhan. It is working on further increasing its production capacity to meet rapidly growing demand in the Chinese automotive market. (From a press release, January 4, 2012) 

- The Wuhan Plant of Shanghai GKN Drive Shaft Co., Ltd. produced its 1 millionth drive shaft for constant-velocity joints on November 26, 2011. The facility, which started operations in 2009, has recently increased its yearly production capacity to 1 million units. (From a press release, January 4, 2012) 

Awards
- The Company was awarded the Excellent Service Award from Shanghai GM at the suppliers’ meeting held by the automaker on February 2, 2012. It also received the Outstanding Performance Award for 2011 from SAIC Motor at the automaker’s annual meeting, while the company’s president, Xue Jinda, was also recognized for his innovative leadership. (From a press release, February 8, 2012)

Certificate

- The Wuhan Plant of Shanghai GKN Drive Shaft Co., Ltd. acquired the ISO14001:2004 environmental management system in January 2012 and the ISO/TS16949:2009 automotive quality management system in February 2012. The company’s Changchun Plant also received the ISO/TS16949 certification in February 2012. (From a press release, March 8, 2012)  

R&D System

- Over the next five years GKN Driveline will be investing 80 million Chinese yuan (approximately 8.7 million euros) to expand its research and development centre in Shanghai.  

-On July 4, 2012, Shanghai GKN Drive Shaft Co., Ltd. started operations of its new drivetrain testing facility at its technical center, and held a ceremony to celebrate the addition of the high-speed drive shaft testing system. The president of the company said the new facility will allow the company to serve as a comprehensive drivetrain supplier, developing from being a manufacturer of drive shafts. In addition to forming alliances with some joint-venture companies in the area of high-speed drive shafts for 4WD vehicles, the company is now working on joint development of final drive systems, differentials, and electronic torque controls for 4WD vehicles with Volkswagen, General Motors, Ford and other automakers. (From a press release, July 9, 2012)

Major Achievements and Developments in FY 2011

-On April 28, 2012, the Company held an innovation meeting to introduce its major achievements and development projects, and present awards to excellent projects for 2011. During 2011, the company developed 119 new technologies, started mass production of 21 new products, released 43 new products, supplied 8,020 sets of sample products, and completed 100 percent of its planned development projects. The first prize was given to the following three programs: 1) the first phase of the plant construction project in Changchun; 2) a local production program for the Tiguan propeller shaft assemblies; and 3) the Audi C7 project. Major new technologies presented during the meeting included a torque management technology, a local production program for driveshafts, and a BMW spline cold stamping technology. (From a press release, May 3, 2012) 

Cooperation with university

-The Company and the Electro-Mechanical College of Chonqing University signed a long-term partnership agreement on the campus on June 20 to collaborate in the area of education and R&D. The member of the GKN Group aims to enhance its technological capability through the alliance. GKN has developed a number of student support systems nationwide, including scholarship programs, practical training programs, and employment of new graduates. Six students at Chongqing University are receiving scholarships from the company. (From a press release, June 25, 2012)

Investment in China

-The Company held a groundbreaking ceremony for its second plant in Wuhan at the Wuhan Economic & Technological Development Zone on August 27. The total investment in this project is expected to reach 1 billion yuan, of which 380 million yuan will be allocated to the first phase to build two precision forging lines. The facility is expected to be completed in June 2013 with the capacity to manufacture 11 million precision forged parts a year. These products for use in constant velocity drive shafts, will be supplied to customers operating in Central China, Northeast China, and Eastern China. (From a press release, August 29, 2012).