Wanxiang Qianchao Co., Ltd. Business Report FY ended Dec. 2013

Business Highlights

Financial Overview

(in million yuan)
FY ended Dec. 31,2013 FY ended Dec. 31,2012 Rate of increase (decrease)(%) Factors
Sales 9,262.16 8,339.81 11.06
Operating profit 634.98 329.89 92.48 -Profit decreased as a result of slowdown in automobile industry growth, serious competition and increase of labor and R&D expense
Ordinary profit 697.96 435.01 60.45
Net profit 603.61 381.74 58.12


-On Feb. 18, 2014 (U.S time), the Company was approved by U.S. bankruptcy court that it won the bidding for Fisker Automotive, an electric vehicle manufacturer in the U.S.

-The Company announced that it will acquire Wanxiang Tongda shares for CNY 644 million. Wanxiang Qianchao will pay CNY 476.6 million to the Wanxiang Group, which holds a 66.6 percent share, while paying CNY 167.4 million to Hubei Tongda Industrial, which has a 23.4 percent share. Wanxiang Tongda, capitalized at CNY 300 million, produces and sells mufflers, catalytic converters, fan couplings, fuel tanks and other vehicle components. (From an announcement by the company on December 4, 2013)

-The Company said its plan to acquire a U.S. battery supplier A123 Systems was approved by the Committee on Foreign Investment in the United States (CFIUS) on January 28. Share transfer will soon be completed, finally putting an end to the takeover attempt that started five months ago. The Chinese supplier is expecting the acquisition to become a steppingstone to the global clean energy market. (From a press release, January 30, 2013)

Financial Overview of Subsidiaries

-The Company announced that Zhejiang Wanxiang Jinggong Co., Ltd., its subsidiary, has achieved a year-over-year sales increase of more than 20 percent in OEM business during 2013. Growth was significant in business with the Volkswagen Group, including FAW-VW and Shanghai VW, as well as with Guangzhou Automobile, Shanghai Automobile and Great Wall. (From a press release on January 5, 2014)


-In 2013, the Company's subsidiary, Huainan Qianchao Bearing Parts Co., Ltd. decided to dissolve. (From the Company's 2013 annual report)


-The Company announced that it absorbed Zhejiang Qianchao Precision Forging Co., Ltd., its wholly owned subsidiary, into its own operations. Zhejiang Qianchao Precision Forging, capitalized at CNY 100 million, produces forging and casting products. In 2012, it generated approximately CNY 295 million in sales and approximately CNY 3 million in net profit.


-In December 2013, Hubei Tongda Co.,Ltd., a subsidiary of the Company, announced that it has received the 2013 Excellent Supplier Award from Dongfeng Motor Commercial Vehicle Co., Ltd. (From a press release on December 26, 2013)

-In April 2013, the Company announced that its plant that produces drive shafts for constant velocity joints has been designated as an A-class supplier by Shanghai Automobile. (From a press release on April 5, 2013)


R&D Expenditure

(in million yuan)
FY ended Dec. 31,2013 FY ended Dec. 31,2012 Rate of increase (decrease)(%)
R&D Expenditure 359.26 332.51 8.04
Ratio of sales (%) 3.88 3.99 -

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.

Investment Activities

Capital Investment Projects

(As of Dec. 2013)
Wanxiang Qianchao Chongqing Automotive Parts Co., Ltd.
Project Planned amount of investment (in million yuan) Investment made in 2013 (in million yuan) Project progress
Constructing facility to manufacture carburized bearings (annual production volume: 600,000 sets)  24.18 6.01 95%
Constructing additional facility to manufacture ABSs at Wanxiang Jinggong 21.50 0.52 99%
Constructing the second plant at Huainan 25.00 - 100%
Constructing additional facility to manufacture constant velocity drive shaft assemblies  1,943.72 103.76 90%
Constructing additional facility to manufacture wheel hub units used in passenger vehicles 1,807.76


Establishing additional facility to manufacture high-performance drive shafts (annual production volume: 600,000 sets) 166.00 22.02 95%
Constructing transmission shafts at Shiyan Factory 10.00 2.06 85%
Constructing additional facility to manufacture chassis modules at Hefei Wanxiang Qianchao Automotive Parts 25.39 0.55 70%
Constructing the third plant to manufacture castings at Henan Province 20.00 7.84 90%
Constructing additional facility to make universal joints (annual production volume: 20 million sets) and differential assemblies 118.00 13.40 55%
Constructing a plant to manufacture ABSs and brake modules at Shanghai 94.74 25.40 80%
Airbag project 40.00 1.55 15%
Constructing the third plant at Jiangsu Sunway Co.,Ltd 20.43 6.10 95%
Constructing the second parts stamping plant at Hubei Province 15.00 2.25 100%
Constructing precision hub bearings used in passenger vehicles 39.00 0.61 95%
Constructing the second bearing plant at Jiangsu Province 10.69 2.44 90%
Constructing parts stamping plant at Guilin Province  4.38 0.09 98%
Constructing plant at Wanxiang Qianchao Chongqing Automotive Parts Co., Ltd. 146.26 12.51 60%
Project at Wanxiangqianchao (shanghai) Automotive Systems Co., Ltd. 200.00 25.90 40%
Electrical engineering project 112.52 2.92 20%
60,000 tons casting project 297.00 13.96 10%
Roller production project at Huainan Qianchao Bearing Co., Ltd. 30.50 0.60 25%
Bearing capacity expansion project at Huainan Qianchao Bearing Co., Ltd. 79.15 4.08 10%
Phase II of machining project at Henan new factory 15.00 8.99 90%
Motor controller project 100.00 0.09 3%
100,000 tons of cold temperature precision casting project 370.00 36.88 10%
Suspension assembly project in Qingdao 10.00 1.81 15%


Investment in China

-The Company announced that Wanxiang Tongda Co., Ltd. signed an agreement in October 2013 to establish a joint-venture plant with Dinex of Denmark. The facility will produce high-performance exhaust gas aftertreatment devices for commercial vehicles by introducing advanced technologies from the European market. The products are expected to meet the China V, the China VI and stricter standards. (From a press release on February 5, 2014)

-The Company announced that it will invest an additional 110 million yuan into its Chongqing Branch, as it aims to expand the subsidiary’s annual production capacity for constant velocity drive shafts to 3 million units. The company has already invested 80 million yuan in the initial phase of the expansion project, increasing the subsidiary’s capital to 120 million yuan from original 40 million yuan. The subsidiary, which is capable of producing 1.2 million constant velocity drive shafts per year, will start small-lot production in October 2013. In the second phase of the expansion project, another 110 million yuan will be invested to raise the capital to 230 million yuan. (From an announcement by the company, August 19, 2013)

-Wanxiang Qianchao (Shanghai) Auto System Co., Ltd., a subsidiary of the Company, announced that it has completed a new automated production line to manufacture Anti-lock Brake Systems (ABSs). The company has spent two years on the construction project. The new production line uses a number of robots and has reduced the workforce by 65 percent on a three-shift system. The company says even an 86 percent reduction on workforce is possible with a four-team, three-shift system. The company has also improved products quality, increased production volumes and reduced management costs by upgrading its facilities and equipment. (From a press release on June 5, 2013)