Reorganizing auto parts business

- In June 2009, Shanghai Ba-Shi (Group) Industrial Co., Ltd., which integrated the SAIC Group's auto parts business and was listed on the stock market, adopted a new company name, HUAYU Automotive Systems Company Limited. This concluded the whole reorganization project for the Group's auto parts business.

 

Partnership with

Jianghuai Automobile

- In March 2010, the Company and Jianghuai Automobile reached a basic agreement setting the framework to form a strategic alliance. The new collaboration is part of the Company's initiatives to build relationships with companies having no affiliation with the Shanghai Automotive Group, its parent company. (From a press release, March 29, 2010)

 

New Plant

- In May 2010, the Company and the Liunan District of Liuzhou City signed an agreement enabling the company to build the facility at the Liuzhou Hexi Industrial Park. The new plant, which will be built on 70,000 square meters of land, will manufacture interior components and seats for medium-class vehicles produced by SAIC-GM-Wuling Automobile. Operations at the facility are scheduled to begin at the end of 2010. The company intends to raise its production capacity there in stages until it reaches 120,000 sets per year.

 

Highlights at subsidiaries and affiliates

YAPP Automotive Parts Co., Ltd.

- In December 2009, YAPP Automotive Parts Co., Ltd., a fuel tank manufacturer in the HUAYU Group, signed a basic agreement setting the framework to form a strategic alliance with FAW Car. This is the first time for YAPP Automotive Parts to form a partnership with a car manufacturer. (From a press release, December 9, 2009)

- In May 2010, YappZoom Automotive Systems Pvt Ltd., which is a joint-venture company between Yapp Automotive Parts Co., Ltd. and Zoom Automotive Systems Pvt Ltd. of India, started mass production of plastic fuel tanks. YappZoom Automotive Systems is owned 51 percent by Yapp and 49 percent by Zoom. Established with a total investment of 1.1 million US dollars, the new production line has the capacity to make 250,000 fuel tanks per year. The joint-venture facility will supply these products to Volkswagen India, Ford India, Mahindra & Mahindra of India, and other automakers. It is planning expansion projects in 2011 including establishing an additional production line at the existing facility and constructing a new plant in Pune in western part of India.

- In July 2010, ABC Group Fuel Systems Inc., which is a U.S. subsidiary of the ABC Group, has signed a strategic alliance agreement with YAPP Automotive Parts Co. Ltd. in China. The two companies will provide plastic fuel tanks across three continents: North America, Europe and Asia. (From a press release on July 22, 2010)

 

Shanghai SIIC Transportation Electric Co., Ltd.

- In March 2010, Shenhua Automotive Electronics Co., Ltd., which is a joint venture company between Donghua Automotive Industrial Co., Ltd., a member of the SAIC Group, and Shanghai SIIC Transportation Electric Co., Ltd., held a line-off ceremony to mark the production launch of window regulators. The company started commercial operations in March 2009. By the end of 2010, the joint-venture facility plans to have the capacity to produce 220,000 instrument panels, 740,000 sensors, and 600,000 window regulators a year; generate 152.51 million yuan in sales, and achieve a return on sales of 7.24 percent. In addition to already supplying its products for buses and light-duty trucks produced by Nanjing Iveco, the company is planning to expand its customer base by supplying them for use also on the Roewe R75 and AP11 manufactured by Shanghai Automotive, and also for use on vehicles made by Liuzhou Wuling. (From a press release, March 30, 2010)

 

Joint venture projects with non-Chinese companies

Yanfeng Visteon Automotive Trim Systems Co., Ltd.

- In April 2009, the Company added Yanfeng Visteon Automotive Trim Systems Co., Ltd., which is a 50-50 joint venture with Visteon, to its consolidated financial statements.

- In July 2010, Yanfeng Visteon Automotive Trim Systems Co., Ltd., a joint venture with Viston, will start constructing a new plant in Liuzhou, China. In the first phase of the project, the company will build a 22,213-square-meter facility. Both Yanfeng Visteon Jinqiao Automotive Trim Systems Co., Ltd. and Shanghai Yanfeng Johnson Controls Seating Co., Ltd. will locate their respective subsidiaries there to manufacture interior parts and seats for use in the Shanghai GM Wuling GP50 and successor models. The company intends to finish the first phase of the construction project by the end of this year and start commercial production.

 

Kolbenschmidt Pierburg Shanghai Nonferrous Components Co., Ltd.

- In October 2009, Kolbenschmidt Pierburg Shanghai Nonferrous Components Co., Ltd., which is a joint-venture company between Shanghai Automotive Industry Corporation and Kolbenschmidt Pierburg held a groundbreaking ceremony at its plant site in the Shanghai Jiading Industrial Zone. The joint-venture company, which produces mainly cylinder heads, high-pressure cast parts and other high value-added products, manufactured 1.8 million cylinder heads and generated 1,140 million yuan in sales of these products in 2008. The company aims to increase its production volume to 4 million units and sales to 1,890 million yuan by 2012. The new plant, which will have 38,900 square meters of building area, is designed to become an advanced auto parts casting facility in which the functions of the head office building, R&D center, and production facility all will be located together. The joint-venture company is investing 920 million yuan in the new plant. (From a press release, November 11, 2009)

 

Kolbenschmidt

Shanghai Piston Co., Ltd.
- In November 2009, Kolbenschmidt Shanghai Piston Co., Ltd. (KS), which is a joint-venture company between Shanghai Automotive Industry Corporation (Group) and Kolbenschmidt Pierburg, will move its operations to a planned new plant in the Shanghai International Automobile City, Jiading District, Shanghai City. KS held a groundbreaking ceremony on October 28. Since this new project is being carried out according to an urban planning project designed by the Shanghai government, an investment firm will invest in and construct the new facility, while KS will lease the property. The plant is expected to produce 7.18 million pistons in 2012. KS generated 360 million yuan in sales in 2008, which included 10.12 million US dollars from exports. (From a press release, November 1, 2009)

 

Shanghai GKN Drive Shaft Co., Ltd.

- In February 2009, Shanghai GKN Drive Shaft Co., Ltd. will invest 5 million yuan to establish a drive shaft plant in the Changchun Industrial Development Zone. The new facility will have the capacity to manufacture 1 million drive shafts per year, making it the second largest drive-shaft production facility in the country, following the company's home plant in Shanghai, the largest driveshaft plant in China.

- In November 24, Shanghai GKN Drive Shaft Co., Ltd. started commercial operations at its new plant in Wuhan. The company invested 230 million yuan in this facility, which produces constant velocity shafts for medium- and luxury-class vehicles such as the Shenlong C5 and the Dongfeng Honda CR-V. Construction work at the plant will be carried out in two phases. The company plans to produce 500,000 drive shafts in 2010, aiming to increase the volume to 1 million in 2011 and 2 million in 2012.

 

ZF Shanghai Steering Co., Ltd.

- In August 2010, ZF Shanghai Steering Co., Ltd. is investing 500 million yuan to establish ZF Shanghai Steering Systems (Yantai) Co., Ltd. in the Yantai Fushan High-Tech Industrial Park. The new plant will manufacture steering systems for Shanghai GM as well as for carmakers operating in Beijing, Tianjin, Qingdao and Hebei. The construction project will be carried out in two phases. In the initial phase, the company is spending 230 million yuan to establish a 28,000-square-meter facility capable of manufacturing 600,000 hydraulic power steering systems per year. Trial operations in this facility are scheduled to begin in May 2011. In the second phase, the company will spend 270 million yuan to establish a 17,000-square-meter facility capable of producing 600,000 column-type power steering systems per year. Annual sales after both facilities are completed and become fully operational are expected to exceed 1 billion yuan.

R&D Expenditure

(in million yuan)

	FY2009
R&D Expenditure	1,470

New Products
- In February 2010, Yanfeng Visteon Automotive Electronics (YFVE), a joint-venture company between the SAIC Group and Visteon developed an instrument cluster and audio systems on Shanghai General Motors' small car Chevrolet New Sail. (From a press release on February 25, 2010)

Capital Investment Projects

(as of Dec. 2009)

Project	Planned amount of investment (in million yuan)	Investment made in 2009 (in million yuan)
Retooling spring production facility	11.0	1.9
Retooling stabilizer production facility	36.2	10.8
Retooling production facility at Shanghai Tractor & Internal Combustion Engine Co., Ltd.	144.5	36.9
Retooling production facility at Shanghai Union Automobile & Tractor Industry Trade Co., Ltd.	89.6	23.8
Retooling production facility at Shanghai SIIC Transportation Electric Co., Ltd.	37.0	20.1
Retooling production facility at Shanghai Cosmopolitan Automobile Accessory Co., Ltd.	29.8	0.5
Retooling production facility at Shanghai Superior Die Technology Co., Ltd.	100.5	28.4
Rotooling production faciity at Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd.	34.3	19.4
Retooling production facility at Yanfeng Visteon Automotive Trim Systems Co., Ltd.	640.9	179.5