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Business Report FY2006 - Wanxiang Qianchao Company., Ltd.:
Business Highlights
Performance
for FY2006 (million
yuan)
Highlights
- In recent years, the Company has been working on localizing production and modularizing products to strengthen its OEM business. As a result of the Company starting to supply products from its new plants that were built near major automakers' facilities, sales of chassis products significantly increased. Sales also grew steadily at both the Driveline System Division and Bearing Division, which won OEM agreements from new customers.
| (in million yuan) | FY2006 | FY2005 |
Factors |
| Sales | 3,581.59 | 2,829.26 | - Both sales and income increased year-on-year, thanks to greater sales of high value-added products to leading automakers. |
| Net Profit | 229.27 | 130.62 |
Highlights
- In recent years, the Company has been working on localizing production and modularizing products to strengthen its OEM business. As a result of the Company starting to supply products from its new plants that were built near major automakers' facilities, sales of chassis products significantly increased. Sales also grew steadily at both the Driveline System Division and Bearing Division, which won OEM agreements from new customers.
Chassis Systems
- In December 2006, Harbin Wanxiang Hafei Auto Chassis System Co.
,Ltd., a subsidiary of the Company, established Harbin Wanxiang
Automotive Parts Co., Ltd. to manufacture chassis products.
- Wanxiang
Qianchao (Guilin) Chassis Parts Co., Ltd.'s new plant was completed and started operating
on October 19, 2006. The Wanxiang Qianchao Group directly invested in the chassis parts supplier in 2003, which was formerly a state-owned enterprise.
The new plant is expected to accelerate
the growth of the subsidiary, the sales and income of which have risen
significantly over the past three
years.
Driveline Systems
- In June 2006, the Company's Qianchao QC universal joint was designated
as a driveshaft component in vehicles made by FAW Jiefang Automotive
Co., Ltd. and Beiqi Foton Motor Co., Ltd. Wanxiang Qianchao will
be the exclusive supplier of universal joints to these automakers.
- In Dec. 2006, the Company's announced that its constant velocity
drive shaft business marked record high performance for the January-October
period of 2006. Compared to the same term last year, its production
volume was up 89.18 percent, sales increased 96.5 percent, and income
rose 91.3 percent, respectively. The Company, which previously focused
on the aftermarket products, shifted to producing mainly products
for OEMs over the past few years. This year marked the first delivery
of its products to middle- and luxury-class vehicle manufacturers
in China, while discussions with GM are underway. As of Dec. 2006,
the company has the capacity to manufacture more than 1.2 million
constant velocity drive shafts a year.
Bearings
- In March, Jiangsu Qianchao Bearing Co., Ltd. started constructing
a new manufacturing facility in the Zhenjiang Economic Development
Zone in Jiangsu Province, seeking to make a full-scale entry into
the global OEM market. The company, which has already achieved annual
sales of 200 million yuan, aims to increase its annual production
to 40 million sets and sales to 500 million yuan over the next three
years.
- In December
2006, Qianchao Bearing Co., Ltd. announced that the Company will
supply high-end axles to ZF of Brazil. The first phase of the contract is worth some 15 million
yuan.
- In Dec. 2006, Qianchao Bearing Co., Ltd. was awarded an OEM contract
to supply bearings to FAW in 2007. The company and FAW also agreed
on a product development project, technical tie-up, and supply program,
which will further expand the range of the Wanxian-group brand products
to be used in FAW vehicles. The new contract marks a historic achievement
in that Qianchao QC bearings were adopted instead of products made
by two long standing suppliers.
Wheel Hubs
- In March 2006, Zhejiang Wanxiang Jinggong Co., Ltd. launched
operations of its fifth wheel hub assembly line introduced from
Korea. The new line has the capacity to assemble annually 1,074,000
sets of wheel hubs at an assembly speed of less than 20 seconds
per unit.
Investment Activities
Capital Investment Projects
(as of Dec. 2006)
| Project | Planned amount of investment (in million yuan) | Investment made in 2006 (in million yuan) |
Actual Spending by 2006 as a percent of planned amount of investment | Remarks |
| New plant construction at Hubei Wanxiang Auto Parts Co., Ltd. | 30.19 | 20.40 | 95.52% |
- |
| New production lines to manufacture chassis components for Chery Automobile | 29.90 | 2.29 | 75.67% | Setting up production lines to manufacture brakes, brake drums, steering knuckles, etc. for Chery Automobile. |
| New plant construction to produce chassis systems in Guilin | 32.00 | 8.02 | 101.63% | - |
| New plant construction at Zhejiang Wanxiang System Co., Ltd., Liuzhou Factory | 10.00 | 1.21 | 12.10% |
Constructing new plant to manufacture chassis systems for SAIC-GM-Wuling Automotive |
| Facility expansion project to increase steering knuckle production capacity by 80,000 units per year | 27.20 | 19.77 | 83.09% | - |
| 4,000-ton Hot Die Forging Line | 12.00 | 10.96 | 97.58 | - |
| Facility expansion project to increase production capacity for third-generation wheel hubs | 12.50 | 10.86 | 86.91% | - |
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