HUAYU Automotive Systems Company Limited Business Report FY2010

Business Highlights

Financial overview

(million yuan)
FY2010 FY2009 Rate of Change(%) Factors
Sales 44,062.68 24,667.86 78.62% -The rapid growth of domestic automobile market.
-Sales of major products increased a lot.
Operating profit 4,941.95


83.68% The profit increased as the sales increased.
Ordinary profit 4,981.83 2,716.73 83.38%
Net profit 4,485.14 2,544.62 76.26%


-On April 1, 2011, Shanghai Automotive Industry Corporation (Group) and SAIC Motor reached an agreement concerning transfer of the Company  shares from the Shanghai Automotive Group to SAIC Motor. Based on this agreement, SAIC Motor will issue shares to Shanghai Automotive in exchange for a 60.1 percent share in the Company . When the transaction is completed, SAIC Motor will become the largest shareholder of the Company Huayu Automotive, with Shanghai Automotive still maintaining control over Huayu. The deal is subject to approval by shareholders and regulatory authorities. The Company's  shares, which had been temporarily suspended from being traded, are back to the stock market since April 6, 2011. (From a press release, April 6, 2011)


-The Company announced that it will acquire the following shares of stock from Shanghai Automotive Industry Corporation (SAIC) for 316 million yuan. It will purchase 100 percent of the shares in Shanghai Sandmann Foundry Co., Ltd.; 50 percent of the shares in Shanghai Sachs Powertrain Components Systems Co., Ltd.; and 100 percent of the shares in Shanghai Xingfu Motorcycle Co. Ltd. (From an announcement by the company, December 11, 2010)


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)


 Joint venture
Guizhou Aerospace Industry

-The Company and Guizhou Aerospace Industry Co., Ltd. will establish a joint-venture company in Shanghai. The new entity, Huayu Automotive Electric Systems co., Ltd., will be capitalized at 70 million yuan, of which 60 percent will be invested by Huayu and 40 percent by Guizhou Aerospace. The joint venture facility will develop, manufacture, and sell motors and motor control systems, which include ECUs and software for automobiles such as hybrids and electric vehicles, construction vehicles, and industrial machinery. The period of the joint-venture project is 30 years. (From an announcement by the company, October 29, 2010)


Highlights at subsidiaries and affiliates
YAPP Automotive Parts Co., Ltd.

 - 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)

-YAPP Automotive Parts Co., Ltd., a subsidiary of HUAYU, has been chosen by FAW-VW as one of its ten best suppliers for fiscal year 2010 at a supplier meeting held by the automaker. In the past, the company also won the "Excellent Quality Award" for fiscal year 2008, as well as both the "Excellent Supplier Award" and the "Excellence in Product Development Award" for fiscal year 2007 from FAW-VW. During 2010, YAPP Automotive Parts supplied 500,000 fuel tanks to FAW-VW, which made up 56.97 percent of all fuel tanks required by FAW-VW. In addition, YAPP Automotive Parts won a new program business to deliver fuel tanks for Volkswagen's A-platform series. Preparations are being made to supply more than 600,000 fuel tanks per year, starting in 2012. (From a press release, January 14, 2011)

Shanghai Sekely Die Technology

 -On January 22, 2011, Shanghai Sekely Die Technology, a joint venture of the Company, was awarded the Shanghai GM's Best Supplier Award for fiscal year 2010 at the automaker's award presentation ceremony. This is the second time for the company to receive such honorary award since it won the same prize in fiscal year 2009. (From a press release, January 26, 2011)

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 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.

-Yanfeng Visteon (Chonqing) Automotive Trim Systems Co., Ltd. established a new production facility at the Liyu Industrial Park, Tianyuan district, Zhuzhou, Hunan Province, following its establishing the Guangzhou Branch. The Zhuzhou facility will supply instrument panels and door panels to Beijing Automotive's Zhuzhou Plant, starting at the end of 2010, as well as Geely Automobile's Xiangtan Plant, starting in 2011. (From news releases issued by multiple sources on October 24, 2010)

-On September 15, Yanfeng Plastic Omnium Automotive Exterior Systems Co., Ltd. (YFPO) held a line-off ceremony at its Nanjing Jiangning Plant. Construction of this facility started on March 3, 2010. The plant produces bumpers and other exterior components. (From a press release, September 17, 2010)

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.(From a press release, August 23, 2010)

Continental Brake Systems (Shanghai) Co,.Ltd.
-Continental has established a new joint venture named Continental Brake Systems (Shanghai) Co., Ltd. with the Company. With 51% share owned by Continental, this new joint venture will work on development of brake system technology and solutions. The product portfolio contains front and rear axle caliper, rear axle combined parking brake caliper, drum brakes, front and rear axle brake hoses, electronic parking brakes and electronic vacuum pump solutions. Manufacturing facilities are Shanghai Automotive Brake Systems Co., Ltd and Continental Automotive Systems Changshu Co., Ltd. (From a press release on October 25, 2010)

-Continental Brake Systems (Shanghai) Co., Ltd. will produce the MK100 electronic brake systems in Jiading District, Shanghai, starting in 2011. The MK100 brake system weighs only 1.5 kilograms, offering a 30 percent reduction in weight and a 40 percent cutdown in volume compared with conventional brake control units. The new Jiading Plant will start operations in December to supply MK100 systems not only to Japanese automakers but also to automakers based in other countries. (From a press release, October 29, 2010)

Yanfeng KSS (Shanghai) Automotive Safety Systems Co., Ltd.

-Key Safety Systems (KSS) announced that its Chinese joint venture Yanfeng KSS (Shanghai) Automotive Safety Systems Co., Ltd. (YFKSS) was awarded a contract from Geely Group of China for the first time. YFKSS recently started supplying products including driver and passenger airbags, steering wheels and seat belts for the LG-3 Jinying model. (From a press release on October 18, 2010)


R&D Expenditure

(in million yuan)

  FY2010 FY2009
R&D Expenditure 2,040 1,470

Product Development
- 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)

Technological cooperation

-February 16, 2011, Shanghai Behr Thermal System Co., Ltd., which is a subsidiary of Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd., and Shanghai Jieneng Automotive Technology Co., Ltd. of the SAIC Group signed an agreement to conduct a joint development project on thermal control systems for new energy vehicles. Behr's Shanghai operation will play an important role in the field, as Behr of Germany and the SAIC Group are fostering collaboration in the thermal control technology. The collaboration will also help Shanghai Behr enhance local business and improve customer services. (From news releases issued by multiple sources on February 16, 2011)

Investment Activities

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.

Capital Investment Projects

(as of Dec. 2010 )

Project Planned amount of investment (in million yuan) Investment made in 2010   (in million yuan)
Retooling spring production facility at China Spring Corporation Limited 41.57 9.13
Expanding production capacity of compressors at Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd. 55.85 44.51
Retooling production facility at Shanghai Superior Die Technology Co., Ltd. 196.90 88.64
Retooling production facility at Shanghai Tractor & Internal Combustion Engine Co., Ltd. 236.80 131.44
Retooling production facility at Shanghai Union Automobile & Tractor Industry Trade Co., Ltd. 80.00 11.75
Retooling production facility at Shanghai Automotive Brake Systems Co., Ltd. 18.79 15.59
Retooling production facility at Yanfeng Visteon Jinqiao Automotive Trim Systems Co., Ltd. 221.71 40.08
Retooling production facility at Yanfeng Visteon Automotive Electronics Co., Ltd. 101.39 77.61
Retooling production facility at Shanghai Yanfeng Johnson Controls Seating Co., Ltd 251.18 134.57
Retooling production facility at Yanfeng Visteon (Chongqing) Automotive Trim Systems Co., Ltd. 58.72 52.66