FAW Jiefang Automotive Co., Ltd. Wuxi Diesel Engine Works Business Report FY ended Dec. 2012

Business Highlights

Financial overview
-For FY2012, the Company sold 316, 000 diesel engines and 9,300 refitted cars, reached a sales of 9,100 million yuan, with market share increased 0.8%.

-For FY2011, the Company sold 370,000 diesel engines. The total sales of the Company in 2010 was 10.3 billion yuan.

Domestic Orders 
-January 2013 sales at the Company climbed 4.7 percent from the previous month’s result, while achieving a year-over-year increase of 22.8 percent. Since November 2012, sales at the company continued to improve both from the same month in the previous year and from a month ago. In addition, the percentage of the company’s products used on FAW Jiefang (Qingdao) vehicles has reached 59 percent, up 2 percentage points from the full year average in 2012, with sales to other automakers also having expanded. The ratio of the company’s products used on eight major bus manufacturers rose 3.4 percent year-on-year, with its sales to Yutong Bus having risen 3.65 percent year-on-year and 4.49 percent on a year-over-year basis. (From news releases issued by multiple sources on March 15, 2013)

-During the period between January and July 2012, the Company sold more than 110,000 Kangwei series diesel engines to OEMs, which include Shandong KAMA, Jinbei light-duty truck, and Hongta. The company delivered 28,000 engines to Shandong KAMA alone, increasing the percentage of KAMA trucks equipped with its engines to a record-high 72 percent, and maintaining the top position among its competitors for the fourth straight year. It also won increased requirements from Jinbei, to which it supplied the largest volume of engines among its rivals for the fifth consecutive year with its share reaching 32.2 percent. Since February, it has provided more than 1,000 engines to the HOWO light-duty trucks built by Sino Truck, its new customer. It also won export business to supply 1,400 engines to Vietnam, 300 engines to Peru, and 200 engines to Sri Lanka. (From news releases issued by multiple sources on August 10, 2012)

-A press conference was held in May 2012 to announce the launch of commercial production of Shandong Shifeng Commercial Vehicle Co., Ltd.’s latest light truck, the Fengchi, which is mounted with the Company’ 4DX23-120-SF1AUT engine. The Company claims that the new Fengchi, which incorporates the design concept of passenger cars, is a high-quality vehicle built to offer outstanding riding comfort. The engine mounted on the Fengchi is said to provide excellent performance in terms of power and ease of maintenance. (From a July 10, 2012 press release)

-The Company is supplying 104 CA 6SF2-23E4N1 CNG engines for installation on CNG buses for the Harbin city’s public transportation system. Harbin was chosen as a model city in the low emission transportation program promoted by the Ministry of Transport of the People’s Republic of China. Use of compressed natural gas engine vehicles has already started in the city based on the initiative. Of approximately 200 CNG engine vehicles put on the road in Harbin in 2011, 70 vehicles are powered by FAW Jiefang engines, while the remaining powered by other two engine suppliers. Based on a study of one-year driving results conducted by the Harbin City Transportation System, vehicles powered by FAW Jiefang’s CNG engines consumed 4 to 8 square meters less fuel than other CNG vehicles per 100 kilometer of driving. Moreover, the vehicles achieved the lowest failure rate and fuel consumption, and the highest power performance and maneuverability, which led to the new business. The company’s CNG engines use a multiple fuel injection system offering quick startup, improved reliability, and a high degree of eco-friendliness. (From a press release, June 26, 2012)

-The Company is enjoying strong sales of natural gas engines. The company, which supplied the CA6SN1-42E4N1 420hp natural gas engines for 100 Jiefang mining trucks purchased by a coal company in Heilongjiang, will also supply the CA6SN1-39E4N2 liquefied natural gas engine to 50 Jiefang trucks, which will be used by a coal supplier in ShanxiProvince. The CA6SN1-39E4N2 engine was developed based on the Aowei CA6DN1.The new engine with a lightweight LNG tank and adopting the Econtrol combustion gas control system of the U.S. offers a longer driving range and improved fuel economy compared with CNG engines. (From a press release, May 14, 2012) 

-The Company produced and sold more than 100,000 engines during the first quarter of 2012. The company, which was ranked third largest Chinese engine seller in 2011, came in second for the term. Its market share also climbed from the previous year by 4.5 percentage points. The company enjoyed favorable sales to the FAW Group, especially of the Aowei series 9-liter and 11-liter engines, with sales of the 11-liter engines reaching 5,800 units. Sales to bus manufacturers were also strong, with public buses installed with the company’s engines operating in many cities. The company started full-scale production at its new diesel engine plant in Huishan, Wuxi, while its research and development division accelerating development in the area of new energy vehicles and hybrid vehicles. (From a press release, April 13, 2012) 


-The Company, which achieved a 25.23 percent increase in sales of bus engines in 2011, is maintaining strong business this year. Its sales in January and February reached the new records for the months by going up 34.52 percent and 30 percent from the results in the previous year, respectively. Brisk sales were significant in the liquefied natural gas engine segment as well as engines for public buses used in large cities such as ShanghaiTianjin and Shenyang. In the area of engines for school buses, the company won new programs in GuilinGuangzhou and Zhuhai, in addition to supplying 302 engines to Changan Automobile. (From news releases issued by multiple sources on February 29, 2012)

Overseas Orders
-The Company said that during January 2013, the company exported more than 1,100 engines, including those for use in power plants. These included 60 units of CA6Dl1-30 engines for the FAW Jiefang (Qingdao) CA4161 trucks sold in Indonesia, as well as 100 units of 4DW turbocharged engines with an intercooler for Vietnam. Last year, the company delivered a record-high 12,194 engines to the markets overseas. The company attributes the strong global sales to the high levels of fuel efficiency, noise absorbing feature and driving stability its engines can provide. (From a press release, January 30, 2012)

-On December 23, 2012, the Company got its four Euro lV diesel engines (CA4DF4-17E4, CA4DL1-21E4, CA6DL2-35E4 and CA6DM2-42E4) homologated by the Thai authorities on December 23, 2012. The company, which places a high importance on Euro lV engines for the international markets, is expecting the certification becoming a steppingstone to its penetration into Thailand. (From a press release, December 22, 2012)

-Twelve Jinbei SY1060DRY01 trucks for delivery to Bolivia rolled off the production line at Shenyang Jinbei on June 14, 2012. The 3-ton trucks are powered by the 4DX23-120-JB2AW turbocharged engine equipped with the Kangwei intercooler made by the Company. Shenyang Jinbei has already produced approximately 500 SY1060DRY01 trucks, which were given high grades from the users. The company is looking to win more business from Bolivian customers if the trucks meet their expectations. The Company has been supplying engines to Shenyang Jinbei since 2007. Over the last three years, it has been delivering the largest volume to the OEM among other engine suppliers. (From a press release, June 26, 2012) 

-The Company has been enjoying strong demand from overseas this year. It has exported over 4,000 diesel engines during the four-month period from January through April, which was a 15 percent increase from the same period in 2011. Sales of engines with turbochargers and intercoolers were especially brisk with the business amount accounting for 72 percent of overall exports. The company has been exporting its products mainly to Russia, Iran, Vietnam, the Middle East, and North Africa. To Iran, the company delivered 100 Jiefang J6 trailers equipped with the CA6DM engine in February, which has raised the total number of vehicles mounted with the M-series engines in Iran to 500. All of these engines are compliant with the Euro lll emissions standards. Meanwhile, the company exported 450 Jiefang dumper trucks to Russia in March and April. The company has supplied over 20,000 engines to the country ever since its started export to the country in 2008. The company supplied 50 CA6DF and CA6DM engines to FAW-Jiefang’s new plant in South Africa that recently started operations. In Vietnam, the company began to deal with several new companies. It has already supplied 1,000 engines since the beginning of this year. All engines are equipped with turbochargers and intercoolers. The company has also won programs to supply over 100 engines to Peru, Ugandan, and Indonesia. (From a press release, May 10, 2012)


-Has its own R&D center.
Affiliated Institutes (2 companies)
-Changchun Automobile Research Institute
-Wuxi Spherical Graphite Cast Iron Institute

Product development

-On December 16, 2012, FAW Jiefang Automotive Co., Ltd. Wuxi Diesel Engine Works announced its 4DX Kangwei and the 4DW New Kangwei diesel engine for mini vehicles in Jinan City. Combining the advantages of the existing model and the Fuwei engine, the company’s another engine series for mini vehicles, the New Kangwei engine is equipped with a common rail system that can optimally control fuel injection and injection timing. The technology also offers a significantly improved engine performance in the low-speed range and high load, and is compliant with the China lV emissions standards. Sales of the Kangwei series engines, which initially totaled approximately 12,000 units in 2006, increased to over 200,000 units by 2009. About 1,450 service centers are located throughout the country. (From news releases issued by multiple sources on December 21, 2012)

Investment Activities

Building Huishan facility 

- At the end of 2011, the Company has completed the first phase of its construction project for a new diesel engine plant for heavy-duty vehicles in Huishan, Wuxi, and started its operations. The company has already spent 1.67 billion yuan on the first phase of the 2-billion-yuan-project. By March 2012 the plant will have the capacity to produce 50,000 CA6DM 11-liter diesel engines a year. The second phase of the construction program has already begun to increase its cylinder block production capacity for 6DM engines to 75,000 units a year with an investment of 520 million yuan. The new operation is planned to start at the end of 2012. The construction project is included in the FAW Group’s 12th five-year business plan. The third phase of the project is to be completed at the end of 2014, and its yearly production capacity its expected to climb to 250,000 engines in the future. During 2011, the company sold 370,000 engines, generating 10.3 billion yuan in sales and 250 million yuan in profit. It aims to sell 400,000 engines and achieve sales of 11.8 billion yuan in 2012. (From news releases issued by multiple sources on February 24, 2012)