Weichai Power Co., Ltd. Business Report FY ended Dec. 2012

Business Highlights

Performance for FY2012

(in million yuan)
  FY2012 FY2011 Rate of Change(%) Factors
Sales 48,165.39 60,019.27 (19.75%)

-Decline in the heavy truck market.

Operating profit 3,718.87 7,169.91 (48.13%)


Ordinary profit 3,959.81 7,418.51 (46.62%)
Net profits 3,234.27 6,319.99 (48.82%)

-The Company announced that it produced approximately 513,000 engines during 2012, which was a decrease of 24 percent from last year’s 673,000 engines. Sales stood at 33 billion yuan, dropping 34 percent from the previous term’s 50 billion yuan. The company’s future production and sales targets remain unchanged. It expects to produce 1.2 million engines in 2015, and 2 million engines to generate 300 billion yuan in sales in 2020. (From a press release, January 17, 2013)

New Order

-The Company said it has successfully produced Moteurs Baudouin’s 6M26.2 diesel engines in China, and is going to export six China-made engines to France for the first time. The company, which has been working on the Baudouin M26 engine production project in China since 2009, is already manufacturing the Baudouin 6M26 and 12M26 engines in the country. Unlike Baudouin, which is using a unit production system, Weichai employs a flow-line production system, which will enable the company to build 1,500 engines a year. (From news releases issued by multiple sources on October 13, 2012)

-The company's annual sale of WP5 and WP7 engines is 7,452 units, an increase of 75.1% over last year.The company began to supply to psaaenger and heavy truck makers in 2012.(From the Company's 2012 annual report)

Joint-venture company

-The Company and Germany-based KION Holding 1 GmbH agreed in August 2012 that Weichai would acquire the following new shares in the Kion Group: a 25 percent ownership in Kion; and a 70 percent ownership in Linde Hydraulics, which is a new, hydraulic equipment company to be established based on a spun off unit of KION. The company, however, said on December 20, 2012 it has partially revised the plan by changing the acquirer of the shares to Weichai Power (Luxembourg) Holding S.a.r.l., an indirect subsidiary of Weichai. The revisions also include option transactions to raise its ownership up to 33.3 percent instead of the 30 percent originally planned. (From an announcement by the company, December 20, 2012)

-The Company announced on August 31, 2012 that it has reached an agreement with KION Holding 1 GmbH, the world’s second largest forklift manufacturer, to form a strategic business alliance. Based on the agreement, the Company will spend 467 million euros to purchase new Kion shares, which will make up 25 percent of all Kion stock. In addition, the Comoany is given a right to raise the shareholding ratio in the company to up to 30 percent in the future. The Company will also acquire a 70 percent controlling stake in Linde Hydraulics, Kion’s hydraulic technology unit, for 271 million euros. (From an announcement by the company, August 31, 2012)


New market

-The Company.’s four natural gas engine series, namely the WP6NG, the WP7NG, the WP10NG and the WP12NG passed the ECER49-05B1 Euro IV emissions standards. Certifications were given by the Russian GOST center. The ECE Euro IV emissions standards are employed in Russia. Tested on the European Transient Cycle (ETC) using the GR high-calorie gas and the G25 low-calorie gas, the four engines all satisfied the Euro IV emissions criteria. Building on the achievement, the company aims to tap into the markets of Russia, the CIS and Eastern Europe. (From a press release, March 8, 2012)


-Zhuzhou Torch Spark Plug Co., Ltd., which is a subsidiary of the Company,  received the Excellent Supplier Award from Shenyang Aerospace Mitsubishi Engine for the 10th consecutive year. The award was given at the 2012 supplier meeting held by Shenyang Aerospace Mitsubishi Engine on November 21. (From a press release, December 2, 2012)


R&D structure

- The Company has R&D centers in China and Austria.

R&D center

-On Oct. 27, 2012, Shaanxi Hande Axle Co., Ltd., a subsidiary of the Compan., held a groundbreaking ceremony at the Shaanxi Automotive Group’s Industrial Park in Xi'an Jingwei for a project to expand its testing facilities that will be built on 5,000 sq. meters of land. The office and testing facilities combined will have 11,000 sq. meters of floor space. The project, which involves an investment of 120 million yuan, is scheduled for completion at the end of 2013.The use of the new testing facilities will augment the Company’s capabilities in terms of developing new products and making further product improvements. Doing so will enable the Company to better respond to the ever diversifying market. (From an Oct. 30, 2012 press release) 

-Shaanxi Hande Axle Co., Ltd., a subsidiary of the Compan., has been working on the joint development of EV axles with a car manufacturer, a motor supplier, and Tsinghua University based on a national project. The company says the development team has been making a stable progress since the program was launched a year ago. Having already completed structural designing process, motor and vehicle application studies, and compatibility analysis with bearings and gears, it will now work on topology optimization and weight reduction. After completing the whole design plan by the end of September, it will conduct prototype production and testing. The development project is expected to be finished by June 2013. (From a press release August 7, 2012)


Product development

-Weichai Westport Inc., which was established in 2008 through a joint investment by the Company, Westport Innovation Inc. of Canada, and Hong Kong Peterson (CNG) Equipment Limited., announced China’s first high-power direct injection natural gas engine (HPDI) on March 13, 2012. The HPDI engine, which incorporates Westport’s HPDI technology into Weichai Power’s WP12 engine, offers the same levels of output and torque as that of a diesel engine. Compared with a conventional spark ignition natural gas engine, it achieves a 20 percent improvement in output and torque levels. The new engine uses oxidation catalyst. After 5 percent diesel fuel is injected into the cylinder for ignition, 95 percent natural gas will be burned by high power injection of 300bar. The technology contributes to cutting down on particulate matter and CO2 emissions by 70 percent and 20 percent, respectively to meet the new China V standards. In case of diesel engines, use of a high-cost, selective catalyst reduction (SCR) system is normally required to comply with the China V regulations. The HPDI engine, however, is expected to achieve a substantial saving in fuel costs, because natural gas is more affordable and fuel consumption will drop thanks to both the non-throttle mechanism, which controls engine loads, and the high power direct injection nozzle, which was designed based on the common rail injection engine. Another advantage of the new technology is the high percentage of parts that can be shared with diesel engines, which eliminates the needs of modifying the designs of pistons and engine units for exclusive use. (From a press release, March 14, 2012)

Technological Partnership

- On March 16, 2012, Shaanxi Hande Axle Co., Ltd., which is a subsidiary of the Company held an opening ceremony for its new “Development Center for Axle Technology” it established through a joint investment with the automotive engineering division of Qinghua University  This research center will develop platforms to measure the levels of fatigue strength, vibration, noise, and overall performance of axles. It will also design platforms to numerical assess the structural performance of axles, while developing human resources to provide technical supports to establish an advanced, global-level R&D center for axles. (From a press release, March 19, 2012)

New Products

-The Company announced its WN20 power unit at the China Beijing International Exhibition on Buses, Trucks & Components held in Beijing from May 16 through May 18, 2012. The power unit consisting of a combination of either a 4-12 liter diesel engine or a natural gas engine compliant with China lV and V emissions standards, and a 5-16-speed automatic transmission enables use of a hybrid technology by making minimum design changes. It is most suitable for application on 10-12 meter buses used for public transportations. Based on a testing adopting the GB/T19754-2005 system, the WN20 power unit can cut down on CO2 emissions by 80 tons and reduce fuel consumption by 30 percent in 400,000-kilometer route driving in eight years. The WN20 was featured on a Yangzhou Yaxing Motor Coach’s bus at the exhibition. (From a press release, May 25, 2012)

-Three school bus models under the Big Nose brand of Yangzhou Yaxing Motor Coach, namely the JS76730XC, the JS6660XC, and the JS6661XC, were released off the production line on May 13, 2012. The bonnet buses were developed through a joint project between the Company's Shanghai Research Center and Yangzhou Yaxing Motor Coach. Designed based on school buses used in the U.S., the vehicles have reinforced structure to protect safety of the occupants. The Company's Shanghai research center developed a special chassis, on which the fuel tank is placed between the frame members, offering maximum protection of the tank to prevent fuel from leaking even at the time of side collisions. (From a press release, May 17, 2012) 

-The Company announced on May 8, 2012 that it will start to mass-produce China’s first diesel engine common rails for heavy-duty vehicles. Up until now, Chinese automakers have had to rely on high cost ECUs made by foreign suppliers, and this has been holding back development of the diesel engine industry in China. In addressing such issue, the company has been working on developing such ECU’s on its own by pouring a large capital and human resources into the area since 2008. The new ECU uses a high-performance, 32-bit micro controller unit which can withstand harsh environments. Its performances were proved by various experiments, such as temperature testing in the range from -40 to 105 degrees Celsius, vibration testing, electromagnetic compatibility (EMC) testing, and a 1,700-hour speed durability testing. Offering the rail pressures control accuracy of 10bar and injection rate of 5 times, the common rail manages and conducts failure diagnostics for the subsystems of vehicles and engines. In addition, the technology is compliant with the China V emission standards with a service life of 20,000 hours. (From news releases issued by multiple sources on May 10, 2012) 

-Zhuzhou Torch Spark Plug Co., Ltd., a subsidiary of the Company, released its new iridium spark plugs called Iridium Star. The company, which has many years of experience in the field, introduced a 0.6mm iridium electrode to meet the needs for higher fuel efficiency. The Iridium Star comes in four types: the K6II and the LD7II, which are needle types; and the K6IU and the KH6IU, U groove types. The needle type has micro iridium on both the center electrode and the outer electrode. Smaller electrodes raise the voltage of the electrode tops and provide more powerful spark, which reduce the volume of energy required to heat up the center electrode and facilitate flaming combustion. This will lead to powerful explosion, contributing to quick start-up and acceleration. The enhanced ignition performance also improves combustion efficiency of mixer gas, thereby contributing to better fuel economy. The U type with U-shaped inner electrode, on the other hand, provides larger space between the inner and outer electrodes, ensuring the formation of flame kernel. The Iridium Star also offers longer service life, offering at least 80,000 kilometers of driving, as opposed 20,000 kilometers in normal spark plugs. According to test results, the new spark plug technology also reduces fuel consumption by 3 to 15 percent per 100 kilometers of travel. (From a press release, April 1, 2012)

Investment Activities

Capital investment projects for FY2012 

(Automotive business only)

Project Beginning of the year
(in million yuan)
 End of the year
(in million yuan)
Renovation and expantion production lines at Weichai Power 1,527.85 1,326.88 Own funds
Revamping casting production lines at Weichai Power 520.97 752.16 Own funds
Phase II of Shaanxi heavy truck new base  145.66 67.90 Own funds
Revamping production lines making steering products at Shaanxi Fast Gear Co., Ltd. 182.98 387.19 Own funds
Joint three-workshop project of Fast Gear 140.12 41.80 Own funds
Revamping production lines at Zhuzhou Gear 71.48 94.91 Own funds
Revamping production lines at Zhuzhou Plug 22.09 28.48 Own funds
Technology transformation project of Shandong Huadong Casting Co.,Ltd 122.22 129.25 Own funds
150,000 tons casting project of Jinding new plant 246.95 295.89 Own funds