Weichai Power Co., Ltd. Business Report FY ended Dec. 2016
|(in million CNY)|
|FY ended Dec. 31, 2016||FY ended Dec. 31, 2015||Rate of change||Factors|
-Affected by implementation of GB1589-2016 and the rule of New Deal, PPP project promotion and infrastructure investment increase, domestic heavy truck industry increased dramatically.
-In 2016, the Company sold 198 thousand units of engines for heavy duty truck, increasing by 67.8% on a year-over-year basis. The Company sold 220 thousand units of engines for bus, increasing by 5.8% on a year-over-year basis, with 11.3% of the market share in the mid and large-size bus market.
-In 2016, Shaanxi Fast Gear Co., Ltd., the subsidiary of the Company sold 501 thousand units of transmissions, increasing by 23.2%.
Recent Development of Subsidiary
-In July 2016, Linde Hydraulics (KG), a German subsidiary of the Company, began operations of its new plant in Aschaffenburg. (From a press release on July 25, 2016)
-Shaanxi Fast Gear Co., Ltd., a subsidiary of Shaanxi Fast Auto Drive Group Company, announced that it has completed a production line to assemble its S-series transmissions. The new line uses advanced technologies to enable on-line assembly of bearings and shafts, enabling the mass production of the S-series. (From a press release on January 4, 2016)
-The Company will invest USD 60 million to acquire shares in Power Solutions International Inc., a Nasdaq-listed company, and become its largest shareholder. The two companies will form a strategic partnership and closely collaborate on areas including product development, procurement, sales, and services in North America and China. They will also enhance cooperation in the fields of high-power stationary engine and advanced gas engine development. (From a press release on April 10, 2017)
-The Company announced that it will acquire a 100% stake in Weichai (Weifang) Medium-sized Diesel Engine Co., Ltd. for CNY 250 million with the aim of combining the Weichai Group's management resources for high-speed engines. Weichai Power will thereafter take a central role in the Group's high-speed engine business. (From an announcement by the Company on September 27, 2016)
-The Company announced that Weichai Power (Luxembourg) Holding S.a.r.l., its wholly owned subsidiary, will acquire 5,934,000 new KION shares for EUR 276 million. The Weichai Power Group will thereby increase its stake in KION to 40.23% from the current 38.25%. (From an announcement by the company on July 20, 2016)
-Shaanxi Hande Axle Co., Ltd. in the Company will absorb the gear business of Zhuzhou Gear Co., Ltd., which is also a Weichai Power group company, and will form a new company that will specialize in the axle gear business. Zuzhou Gear is one of the largest heavy-duty drive axle gear suppliers in China, having the widest variety of product lineup and advanced technologies. Shaanxi Hande Axle is China's largest axle manufacturer and Zhuzhou Gear's key customer. The axle supplier is aiming to acquire gear related technology through the integration. (From news releases issued by multiple sources on July 11, 2016)
-Asiastar in the Weichai Power Group announced that it has received a contract from Shenzhen Xihu New Energy Transportation Development Co., Ltd. to supply 100 electric buses for Shenzhen city’s public transportation. (From a press release on June 13, 2016)
Business Plan for Next Year
-In 2017, the Company plans to reach CNY 107 billion sales, 15 percent increase than previous year. (From the Company's 2016 annual report)
|FY ended Dec. 31, 2016
|FY ended Dec. 31, 2015
|FY ended Dec. 31, 2014
|Ratio of R&D expenses to operating income||3.81%||4.41%||4.21%|
-In 2016, the Company had 4,064 R&D staffs.
-The Company has R&D centers in China and Austria.
-In February 2016, the Weichai Power Group opened a government certified test center for internal combustion engines. CNY 550 million was invested in this facility that performs R&D and reliability testing/projection for internal combustion engines and their major components. The center is expected to contribute to improving product life, enhancing quality, and reducing the failure rates of internal combustion engines made in China. (From a press release on February 4, 2016)
-The Company announced its WP9H/WP10H engines for trucks, buses, and construction machines, which are its first H-platform engines. These engines cover 290-400 ps, and offer up to 700 ps. They produce maximum torque of 1,900 Nm and provide 200 Nm per liter. Their torque limit is 2,300 Nm. These engines' product life of 1.8 million Km/30,000 hours is the longest among high-speed engines for heavy-duty vehicles. (From news releases issued by multiple sources on April 29, 2016)
-In 2016, the Company had the following key R&D projects.
- WP10H Euro VI diesel engine development
- WP7 non-road Tier 4F diesel engine development
- X3000 quality improvement
- Small SUV (S201-2016 capitalization) project
Capital investment projects for FY2016
|(in million CNY)|
|Project||Budget||investment in 2016||Progress|
|Revamping production lines making steering products at Shaanxi Fast Gear Co., Ltd.||2,383.60||163.96||97.11%|
|Test Center construction of Weichai Power||942.31||34.37||98.46%|
|Weifang Power Global Accessories Distribution Center Project||419.62||127.38||30.36%|
-In 2016, the planned investment in the new projects reached CNY 49.3 trillion, increasing 20.9%.