Weichai Power Co., Ltd. FY2008
Business Highlights
Financial overview
Comprehensive partnership with Beiqi Foton Motor
In June 2008, the Company announced that it and Beiqi Foton Motor have signed a comprehensive partnership agreement, which covers a period of five years. The following is an outline of the agreement:
1) Beiqi Foton will gradually increase the ratio of Weichai Power's engines and transmissions it uses in its trucks that weigh 14 tons or more, making the 2007 actual installation ratio the minimum level;
2) except in cases when Beiqi Foton either imports foreign-brand engines or manufactures them through its joint-venture companies, Beiqi Foton will not engage in any activities that compete with Weichai Power, including development or production activities involving diesel engines and transmissions for use in heavy-duty vehicles;
3) Weichai Power will be Beiqi Foton's sole domestic partner in the area of powertrain systems for its future heavy-duty vehicle models;
4) the two companies will further collaborate in various business areas such as service networks, technological development, and market expansion;
5) Weichai Power will invest in Beiqi Foton.
(From an official announcement made by the company on July 1, 2008)
Note: the Company has a 2.18 percent share in Beiqi Foton as of December 2008
Strategic alliance with Baotou Beiben Heavy-Duty Truck
- In July 2008, the Company and Baotou Beiben Heavy-Duty Truck signed an agreement to form a strategic alliance in the areas including product development, new product testing, marketing, and after-the-sale services.
New joint-venture company to manfaucture large-sized, liquid natural gas (LNG), high-speed engines
In July 2008, Weichai Power Co., Ltd., Westport Innovation Inc. of Canada, and Peterson Holdings signed an official agreement to establish Weichai Power Westport New Energy Engine Co., Ltd. The total investment in the new company is expected to reach 150 million yuan. The new company will develop and manufacture large-sized, liquid natural gas (LNG), high-speed engines that make it possible for vehicles to travel more than 800 kilometers on a single tank of gas. The high-pressure, direct injection technology used in these engines, which is the essential core technology, will be provided by Westport Innovation. Construction of the joint-venture plant and the delivery of the majority of equipment have already been completed. When it is finished, the plant's annual production capacity is expected to reach 20,000 engines.
| (in million yuan) | FY2008 | FY2007 | Rate of Change(%) | Factors |
| Sales | 33,127.78 | 29,260.97 | 13.2% | - Sales increased year-on-year thanks to greater sales of engines and transmissions, supported by strong sales of heavy-duty trucks in Japan. |
| Operating profit | 2,625.59 | 3,206.14 | (18.1%) | - Operating profit, ordinary profit, and net profit decreased year-on-year due to soaring materials prices. |
| Ordinary profit | 2,740.81 | 3,277.65 | (16.4%) | |
| Net profits | 2,411.82 | 2,798.08 | (13.8%) |
Comprehensive partnership with Beiqi Foton Motor
In June 2008, the Company announced that it and Beiqi Foton Motor have signed a comprehensive partnership agreement, which covers a period of five years. The following is an outline of the agreement:
1) Beiqi Foton will gradually increase the ratio of Weichai Power's engines and transmissions it uses in its trucks that weigh 14 tons or more, making the 2007 actual installation ratio the minimum level;
2) except in cases when Beiqi Foton either imports foreign-brand engines or manufactures them through its joint-venture companies, Beiqi Foton will not engage in any activities that compete with Weichai Power, including development or production activities involving diesel engines and transmissions for use in heavy-duty vehicles;
3) Weichai Power will be Beiqi Foton's sole domestic partner in the area of powertrain systems for its future heavy-duty vehicle models;
4) the two companies will further collaborate in various business areas such as service networks, technological development, and market expansion;
5) Weichai Power will invest in Beiqi Foton.
(From an official announcement made by the company on July 1, 2008)
Note: the Company has a 2.18 percent share in Beiqi Foton as of December 2008
Strategic alliance with Baotou Beiben Heavy-Duty Truck
- In July 2008, the Company and Baotou Beiben Heavy-Duty Truck signed an agreement to form a strategic alliance in the areas including product development, new product testing, marketing, and after-the-sale services.
New joint-venture company to manfaucture large-sized, liquid natural gas (LNG), high-speed engines
In July 2008, Weichai Power Co., Ltd., Westport Innovation Inc. of Canada, and Peterson Holdings signed an official agreement to establish Weichai Power Westport New Energy Engine Co., Ltd. The total investment in the new company is expected to reach 150 million yuan. The new company will develop and manufacture large-sized, liquid natural gas (LNG), high-speed engines that make it possible for vehicles to travel more than 800 kilometers on a single tank of gas. The high-pressure, direct injection technology used in these engines, which is the essential core technology, will be provided by Westport Innovation. Construction of the joint-venture plant and the delivery of the majority of equipment have already been completed. When it is finished, the plant's annual production capacity is expected to reach 20,000 engines.
R&D
R&D structure
- The Company has R&D centers in China and Austria.
- Its Europe Technical Center, which was established in October 2003 with an investment of 100 billion yuan, developed Landking lll engines by using advanced technology provided by AVL. The new engines meet China lll emissions standards.
Recent developments
Development of Landking diesel engines compliant with the China V emissions standards
- In July 2008, the Company presented the Landking series engines compliant with the China V emissions standards. The Landking China III, IV, and V engines, were developed as "green engines" based on a new design concept and with the joint-collaboration of global parts makers such as AVL. These products have become the Company's flagship product offerings. (From a press release on July 3, 2008)
Development of Landking WP5 and Landking WP7 diesel engines compliant with the EuroIV and EuroV emissions standards
- In December 2008, the Company released its Landking WP5 and Landking WP7 diesel engines, which meet the EuroIV and EuroV emissions standards. These engines' lowest fuel consumption rate is 189g/kWh. They can be used in buses and medium- and heavy-duty trucks, which are 8 to 12 meters in length.
- The Company has R&D centers in China and Austria.
- Its Europe Technical Center, which was established in October 2003 with an investment of 100 billion yuan, developed Landking lll engines by using advanced technology provided by AVL. The new engines meet China lll emissions standards.
Recent developments
Development of Landking diesel engines compliant with the China V emissions standards
- In July 2008, the Company presented the Landking series engines compliant with the China V emissions standards. The Landking China III, IV, and V engines, were developed as "green engines" based on a new design concept and with the joint-collaboration of global parts makers such as AVL. These products have become the Company's flagship product offerings. (From a press release on July 3, 2008)
Development of Landking WP5 and Landking WP7 diesel engines compliant with the EuroIV and EuroV emissions standards
- In December 2008, the Company released its Landking WP5 and Landking WP7 diesel engines, which meet the EuroIV and EuroV emissions standards. These engines' lowest fuel consumption rate is 189g/kWh. They can be used in buses and medium- and heavy-duty trucks, which are 8 to 12 meters in length.
Investment Activities
Capital investment projects for FY2008 (Automotive business only)
| Project | Amount invested (in million yuan) |
Status |
| Establishing a facility to make steering products at Shaanxi Fast Gear Co., Ltd. | 289.19 | This project was already completed |
| Expanding lines manufacturing WD615/618 diesel engines used in heavy-duty vehicles | 214.62 | Under construction |
| Revamping production lines manufacturing WD615/618 diesel engines used in heavy-duty vehicles | 78.47 | Under construction |
| Revamping production lines manufacturing high-power diesel engines at Weichai Power Co., Ltd. | 97.33 | Under construction |
| Revamping production lines manufacturing transmissions at Baoji Fast Gear | 43.14 | Under construction |
| Revamping production lines manufacturing transmissions at Shaanxi Fast Gear | 29.79 | Under construction |
| Revamping production lines at Zhuzhou Gear | 29.21 | Under construction |