Wanxiang Qianchao Co., Ltd. FY2008
|(in million yuan)||FY2008||FY2007||Rate of increase (decrease)(%)||Factors|
|Sales||4,848.29||4,232.51||14.5%||- Sales increased year-on-year as a result of greater sales to global car OEMs. The Company achieved this by shifting its focus to high value-added products and improving product quality.|
|Operating profit||290.35||434.02||(33.1%)||Decreases in profit were mainly due to the following factors:
- A decrease in inventory value
- A decline in investment income
- 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 June 2008, the Company acquired the following equity shares from the Wanxiang Group, its parent company, making them its wholly owned subsidiaries:
1) a 49 percent share in Zhejiang Wanxiang System Co., Ltd;
2) a 40 percent share in Qianchao Bearing Co., Ltd.; and
3) a 40 percent share in Zhejiang Wanxiang Jinggong Co., Ltd.
Though these acquisition projects, the company further reinforce its business framework for its main products namely, chassis systems, drive shafts and bearings. (From an official announcement made by the company on June 12, 2008)
<Highlights by product>
- In March 2008, the Company, which has been working on developing constant velocity joints (CVJs) since 2006 for GM's transplant in South America, launched trial production based on what is referred to as the Production Part Approval Process (PPAP). Prototypes manufactured on these lines have already been delivered to GM and passed test runs. Theses CVTs are expected to replace the ones made in Korea. Based on its strategic partnership with GM, Wanxiang hopes to supply 1 million CVTs per year within the next few years.
- In July 2008, Zhejiang Wanxiang Jinggong Co., Ltd. was designated by VW China as one of its "global suppliers", which gave Zhejiang Wanxiang Jinggong the qualification to supply its products to both Shanghai VW and FAW-VW. The company was given a B-class supplier title from Shanghai VW in 2005, but had never received the global supplier title. The company had spent two years to develop front and rear wheel bearing units since July 2006, when it was approached by VW China to produce these products as replacements for imported parts. With its test results passing VW's screening, the company was qualified as a "global supplier", (Press release, August 8, 2008)
|Name||Wanxiang Technical Center|
|Overview||-The center conducts R&D activities for all the companies under the Wanxiang Group.
-In Nov. 2003, its automotive product laboratory was authorized by the China Quality Certificate Center (CQC) as a contracted CQC testing facility. This enabled the Company to carry out testing of its products based on CCC (China Compulsory Certification) by itself. Qualified products for self-testing include six kinds of automotive components: brakes, drive shafts, CVJ shafts,; universal joints, shock absorbers, and wheel bearings.
|Project||Planned amount of investment (in million yuan)||Investment made in 2007 (in million yuan)||Actual Spending by 2007 as a percent of planned amount of investment|
|Constructing new plant in Henan Province||115.4||115.3||111.3%|
|Constructing additional facility to manufacture constant velocity drive shaft assemblies||1,943.7||139.4||18.3%|
|Constructing additional facility to manufacture wheel hub units used in passenger vehicles||1,807.8||34.2||3.2%|
|Constructing additional facility to manufacture precision bearings (annual production volume: 64 million sets)||480.3||16.5||9.6%|
|Establishing additional facility to manufacture high-performance drive shafts (annual production volume: 600,000 sets)||166.0||12.5||55.1%|
|Constructing new plant at Harbin Wanxiang Hafei Auto Chassis System||25.8||13.7||54.9%|
|Constructing additional facility to manufacture ABSs at Wanxiang Jinggong||21.5||7.0||36.0%|
|Constructing additional facility to manufacture chassis modules at Hefei Wanxiang Qianchao Automotive Parts||25.4||8.3||32.7%|
|Constructing additional facility to make universal joints (annual production volume: 20 million sets) and differential assemblies||118.0||13.3||16.9%|
|Constructing new plant at Zhejiang Wanxiang System Co., Ltd., Liuzhou Factory||10.0||3.1||117.2%|
|Establishing additional facility to make third-generation wheel hubs with ABS sensors at Wanxiang Jinggong||158.3||1.1||134.5%|
|Constructing new plant at Hubei Wanxiang Auto Parts Co., Ltd.||39.8||6.6||125.7%|
|Constructing the second plant at Huainan Qianchao Bearing||25.0||6.3||130.1%|