Yuchai Machinery (Guangxi) Group Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

-The Company posted sales of 36.8 billion yuan in 2010, a rise of 35.45 percent compared with the previous year's result. During the term, the Company sold 749,671 engines, representing an increase of 11.13 percent year-on-year. (From a press release, January 10, 2011)


 -The Company has been awarded a contract to supply all YC6A260-20 engines required by Anhui Ankai for installation on 3,000 HFF6121GZ-4 school buses exported to Saudi Arabia. With this school bus program, Anhui Ankai is making a new record for a Chinese bus manufacturer in terms of bus exports to Saudi Arabia. The business is also providing Yuchai Machinery with the largest bus engine contract for the overseas market in 2011. Delivery of the engines will be made in two phases: 800 units will be delivered by July 15; and 2,200 units by November. (From a press release, May 24, 2011)

-On October 25, C&C Truck's Wuhu Plant started producing the U340 trucks, which use Yuchai United Power's proprietary, next generation YC6K10 large engines. From now on, more than 80 percent of the U340 trucks will be equipped with Yuchai United Power's YC6K series engines such as the YC6K10, YC6K12 and YC6K13. (From a press release, November 2, 2010)

Joint Venture

-On March 7, 2011, the Company, China South Locomotive & Rolling Stock Corporation Limited (CSR) and Sichuan Nanjun Automobile Group Co., Ltd. established a joint-venture company, which is called CSR Yuchai Nanjun Engine Co., Ltd. The new company will be capitalized at 300 million yuan. An investment of 3 billion yuan will be made to construct an engine plant in Ziyang, Sichuan Province, which will become the largest engine production facility in western China. The plant will produce engines for automobiles, railway vehicles, vessels and power generators. When full-scale operations begin, it is expected to produce engines worth 10 billion yuan per year. CSR is China's largest manufacturer of railroad vehicles and rail transit equipment. In 2010, CSR and Yuchai Machinery signed a basic agreement setting the framework for them to form a strategic partnership, as well as a letter of intent for forming a joint venture. (From a press release, March 7, 2011)


Strategic alliances

-On May 26, the Company and Qinghai Yuzhan Dongfeng Automobile Sales Service Co., Ltd., which is the Dongfeng Group’s major sales company in Qinghai Province, agreed to form a strategic business alliance. Qinghai Yuzhan Dongfeng Automobile Sales Service has been selling trucks using Yuchai Machinery engines since August 2010, and now controls about 70 percent of the heavy-duty truck market in the Qinghai Province. Collaboration with this company will help Yuchai Machinery expand its sales network in Qinghai Province. (From a press release, May 31, 2011)

-On June 29, the Company signed a strategic partnership agreement with the Guilin Fuda Group (Fuda), a major auto parts supplier in Guilin, China. Fuda, which produces engine crankshafts, clutches and tractors, is one of the suppliers to Yuchai. By further reinforcing its relationship with Fuda, Yuchai intends to increase the number of products it procures from Fuda. (From a press release, July 15, 2010)



-Guangxi Yuchai Power Machinery, a subsidiary of the Company, has received the Excellent Supplier Award from Nanjing Iveco. (From a press release, January 19, 2011)

-The Company was awarded the Best Supplier Award for 2010 from Dongfeng Commercial Vehicle Company. (From a press release, December 31. 2010)
-The Company received the Excellent Supplier Award for 2009 from both Xiamen King Long United Automotive Industry Co., Ltd. and Xiamen Golden Dragon Van Co., Ltd. (From a press release, March 30, 2010)


<R&D facility>

Facility Overview
Guangxi Yuchai Engineering Research Institute - Established in 2007, this research institute conducts its development activities in four divisions: Product engineering division; Electronic control technology division; Test engineering division,  and Technology management division.
-The focus of its development activities is on engineering technology as practical business solutions to reduce emissions, and developing diesel engines for passenger vehicles.
Combustion engines Union testing Laboratory
-Established in 2009, the new testing laboratory will conduct research and development on combustion technology for diesel engines; along with R&D activities on automotive noise, vibration, and harshness; and on intake systems.
R&D center -Established in 2011, the center is to conduct joint research and development activities for large turbochargers used in vessels and automobiles.

New R&D Center 

-On March 17, 2011,the Company and Dalian Jiaotong University established an R&D center to conduct joint research and development activities for large turbochargers used in vessels and automobiles, in which Yuchai has intellectual property rights. (From a press release, March 18, 2011)

Strategic partnership with CATARC

-On April 1, 2011, the Company and China Automotive Technology & Research Center (CATARC) signed a basic agreement setting the framework to form a strategic partnership. CATARC is a state-owned company established in 1985, authorized by the Chinese Ministry of Science and Technology. The research center assists the government in formulating technical standards and regulations for the Chinese automotive industry. (From a press release, April 2, 2011)


Product Developments

Engines compliant with China V emission standards

-On October 26, Beijing Bafangda Passenger Transport Co., Ltd. started route operations of 50 buses powered by Yuchai Machinery's new engine, the first engine compliant with the China V emissions standards. These buses are the half of 100 buses that Beijing Bafangda Passenger Transport purchased by winning a bid at the end of 2009. They were manufactured by Anhui Ankai. Yuchai Machinery was quickly able to launch the engine compliant with the China V regulations, while many engine manufacturers are still preparing for releasing their engines meeting the previous, China lV standards. Yuchai Machinery has intellectual property rights in the new engine. (From a press release, November 2, 2010)

Investment Activities

Major investment projects


Project Targeted annual production capacity Budgeted amount (in million yuan) Status 2011

Construction of a casting center at Yuchai Industrial Park project - Three production lines to manufacture cylinder blocks and cylinder heads for 0.8-1.2 liter diesel engine

- Production volume is expected to reach 290,000 tons.
960  Construction work began in July 2008
Planned operations launch
(Line No.1: Dec. 2009)
(Line No.2: Dec. 2010)
(Line No.3: Dec. 2012)

Buying equipment such as high effect CNC machines and heat treamment production lines.

 -  13.20  ongoing


Investment in China

-On July 28, the Company started constructing the second production line at its new casting center, which began operating in March 2010 after its first production line was completed. The foundation work for the factory building has already been finished and the company has started purchasing production equipment for the new line, which is scheduled to launch operations either at the end of 2010 or in early 2011. The new line, which will have an annual production capacity of approximately 38,000 tons, will mainly manufacture cylinder caps. Once the second production line starts operations, the site will become one of the largest casting facilities in Asia. (From a press release by the company on October 13, 2010)

-On June 24, Yuchai Machinery Co., Ltd. (Hainan) started operations of a new production line, in which it invested 20 million yuan. Following the implementation of the Euro lll emissions standards in July 2008, the company needed to improve the quality of its gears and revamp its product lineup, so it initiated this facility improvement project this year. By introducing a new production method, the company achieved a 15 percent reduction in power consumption in the heat treatment process. By upgrading some crucial technologies such as cutting, heat treatment, and grinding processes, the company is expecting to increase its production volume from the current 50 million yuan to 100 million yuan. (From a press release, July 6, 2010)

-On March 12, the Company launched operations of the first production line at its new casting facility after the initial phase of the plant construction was finished. (From a press release, June 26, 2010)

-The Company and the city of Liuzhou agreed on a project for the Company to establish a diesel engine plant in the Liudong New District, Liuzhou, Guangxi Province. The Yuchai Machinery Group decided to build the new plant jointly with the Guangxi Lianzhuang Group, investing 1.5 billion yuan. After the plant is completed, it will be able to produce 7 billion yuan worth of diesel engines per year. (From a press release, March 24, 2010)