Wanxiang Qianchao Co., Ltd.
Business Highlights
Financial Overview
| (in million yuan) | FY2010 | FY2009 | Rate of increase (decrease)(%) | Factors |
| Sales | 7,819.68 | 5,569.89 | 40.39 | -Sales increased year-on-year as a result of greater sales to global car OEMs and greater demand in the Chinese market. The Company achieved this by shifting its focus to high value-added products and improving product quality. |
| Operating profit | 472.81 | 312.61 | 51.25 | -Profit increased as a result of sales increased and materials trade increased |
| Ordinary profit | 552.51 | 353.67 | 56.22 | |
| Net profit | 472.39 | 300.86 | 57.01 |
Joint Venture
-Ener1, Inc., a U.S.-based lithium-ion battery manufacturer, announced on January 18 that its subsidiary, EnerDel, and Wanxiang Electric Vehicle Co., Ltd. have agreed to create a joint-venture company to produce lithium-ion batteries for electric vehicles. The new company, Zhejiang Wanxiang Ener1 Power System, will be owned 40 percent by EnerDel and 60 percent by Wanxiang Electric Vehicle, a division of the Wanxiang Group Corporation. The joint venture will manufacture lithium-ion batteries at Wanxiang Electric Vehicle's existing plant in Hangzhou, while harnessing EnerDel's cutting edge technology and intellectual property rights. Its production volume is expected to reach 40,000 batteries in 2014. (From news releases issued by multiple sources on January 21, 2011New Companies
-In April 2010, the Company raised capital for the purpose of establishing new facilities to manufacture 8.4 million constant velocity drive shafts a year. As part of this project, the company will build a new plant to produce 3 million constant velocity drive shafts a year in Wuhu City, Anhui Province. (From an announcement by the company, March 14, 2011)-Zhejiang Wanxiang Jinggong Co., Ltd., which is a subsidiary of the Company completed the first phase of the construction project at its new wheel hub bearing plant in Taizhou, Jiangsu. Operations at the new facility began on March 28, 2011 with an annual production capacity of 2.5 million sets. At the same time, the second phase of the project was launched to build an additional facility on 70,000 square meters of land. The company aims to increase the Taizhou Plant’s total production capacity to 10 million sets a year by 2014. The addition of the Taizhou operations is expected to double the company’s overall production capacity from the current 10 million sets to 20 million sets by 2014, contributing to raising the company’s market shares to 50 percent in China and 10 percent in the international market. (From a press release, April 7, 2011)
-Zhejiang Wanxiang Jinggong Co., Ltd., which is a subsidiary of the Company Wanxiang Qianchao Co., Ltd. will establish Jiangsu Wanxiang Jinggong Co., Ltd. to increase its production capacity. The new company will be capitalized at 100 million yuan, which will be fully invested by Zhejiang Wanxiang Jinggong. Total investment in the project is planned to reach 500 million yuan. Jiangsu Wanxiang Jinggong will be capable of manufacturing 10 million wheel hub units a year. (From a press release, December 16, 2010)
-The Company will establish a new subsidiary in Shanghai to manufacture anti-lock brake systems and brake system modules. The new company, which is tentatively being called Wanxiang Qianchao Automotive Parts Co., Ltd. (Shanghai) will be capitalized at 100 million yuan. The amount will be fully provided by the Company. The company is planning to invest 200 million yuan in total, intending to localize commercial production of parts destined to the Shanghai market. In addition to serving as a model plant, the facility will also function as a training center. (From a press release, April 29, 2010)
Partnership
-The Company announced on December 30, 2010 that the Wanxiang Group and Wanxiang Electric Vehicle have agreed on the following strategic partnerships:1) The Company will take priority in or hold an exclusive right on selling its automotive components to Wanxiang Electric Vehicle, while Wanxiang Electric Vehicle will provide support to the Company in developing and selling new energy vehicle components by leveraging its technologies and know-how it has accumulated over the years. 2) The Company will support and inject capital into Wanxiang Electric Vehicle, which is showing poor business performance, as industrialization of its pure electric vehicles still remains very difficult. Capital injection will be made either when conditions are right or when the electric vehicle is fully industrialized to stabilize Wanxiang Electric Vehicle's business conditions. Investment will be made by transferring Wanxiang Electric Vehicle's shares held by the Wanxiang Group to the Company or injecting additional capital in Wanxiang Electric Vehicle, or by doing both. The actual ratio of shareholding will be decided by the three companies.(From an announcement by the company, December 30, 2010) Contracts
-On May 18, Gonow Auto signed an agreement to form a business alliance with the following three auto parts suppliers located in Xiaoshan, Hangzhou City, Zhejiang Province: The Company, Zhejiang Asia-Pacific Machine & Electric Co., Ltd., and Yuanchi Holdings. Based on the agreement, the three companies will supply more than 20 products to Gonow Auto.-Wanxiang EV Co., Ltd. has begun to supply lithium-ion phosphate batteries for the s18 electric vehicle manufactured by Chery Automobile. The two companies started negotiations on the project in 2009, finally reaching agreement so that the batteries could be supplied.
-Qianchao Bearing Co., Ltd., a subsidiary of the Company, is the first company in China qualified to supply taper roller bearings to Hyundai Motor. The company plans to deliver 13 types of these bearings from March. (From a press release, January 7, 2010)
R&D
R&D Facility
| Name | Wanxiang Technical Center |
| Year established | 1994 |
| 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. |
Product Development
-On May 7, the Company and Shanghai VW signed an agreement on a project to jointly develop anti-lock brake systems (ABSs). The agreement outlines the details such as the vehicle models, specifications, inspection criteria, and the respective responsibilities to be undertaken by each company. An official of Shanghai VW who attended the signing ceremony said that this project is not only significant to each company in terms of developing ABSs that will be produced locally in China but also is a milestone in terms of breaking up the monopoly that foreign based companies have held in the ABS market. (From a press release, May 15, 2010)Investment Activities
Capital Investment Projects
(As of Dec. 2010)
| Project | Planned amount of investment (in million yuan) | Investment made in 2010(in million yuan) | Actual Spending by 2010 as a percent of planned amount of investment |
| Constructing a new plant at Hafei | 38 | 8.5 | 95.5% |
| Constructing facility to manufacture carburized bearings (annual production volume: 600,000 sets) | 24.2 | 2.4 | 84.8% |
| Constructing additional facility to manufacture ABSs at Wanxiang Jinggong | 21.5 | 0.5 | 95.7% |
| Constructing the second plant at Huainan | 25 | 0.9 | 98.4% |
| Constructing additional facility to manufacture constant velocity drive shaft assemblies | 1,943.7 | 127.1 | 28.7% |
| Constructing additional facility to manufacture wheel hub units used in passenger vehicles | 1,807.8 | 27.2 | 1.8% |
| Establishing additional facility to manufacture high-performance drive shafts (annual production volume: 600,000 sets) | 166.0 | 11.0 | 63.0% |
| Constructing transmission shafts at Shiyan Factory | 10 | 4.5 | 46.5% |
| Constructing additional facility to manufacture chassis modules at Hefei Wanxiang Qianchao Automotive Parts | 25.4 | 1.7 | 47.7% |
| Constructing the second plant to manufacture castings at Henan Province | 24.0 | 5.7 | 23.9% |
| Constructing additional facility to make universal joints (annual production volume: 20 million sets) and differential assemblies | 118.0 | 14.9 | 12.63 |
| Constructing a plant to manufacture ABSs and brake modules at Shanghai | 94.74 | 0.1 | 0.12 |