HUAYU Automotive Systems Company Limited Business Report FY ended 2015
Business Highlights
Financial overview |
(million yuan) |
| FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | Rate of Change(%) | Factors | |
| Sales | 91,120.20 | 73,972.59 | 23.18% | -Sales of major products increased. |
| Operating profit | 7,362.94 | 6,782.38 | 8.56% | - |
| Ordinary profit | 7,726.75 | 6,981.94 | 10.67% | |
| Net profit | 6,928.65 | 6,195.51 | 11.83% |
Recent Development
-The Company announced that Huayu Automotive System (Shanghai) Co., Ltd., its wholly owned subsidiary, will invest CNY 170 million in Shannxi Qinghua Vehicle Safety System Co., Ltd. to acquire a 35% share in the safety system company. Shannxi Qinghua Vehicle Safety System is a joint venture among four companies: North Special Energy Group Co., Ltd.; Xi'an Qinghua Civil Explosives Corp., Ltd.; Shaanxi Province Industry Investment Co., Ltd.; and Shaanxi North Jia Sheng Commerce & Trade Co., Ltd. It produces and sells auto parts such as airbags, ignition parts, and inflators. The four shareholders have agreed on the investment plan by Huayu. (From an announcement by the company on December 29, 2015)
-In October 2015, the Company announced that Huayu Pierburg Anting (Shanghai) Nonferrous Components Co., Ltd. held an opening ceremony. (From news releases issued by multiple sources on November 2, 2015)
-In April 2015, Kolbenschmidt Pierburg Shanghai Nonferrous Components Co., Ltd. and Shanghai Cosmopolitan Automobile Accessory Co., Ltd. in the Company's Group, signed a contract to integrate the two companies' die-casting operations. Kolbenschmidt Pierburg Shanghai Nonferrous Components is a 50-50 joint venture between HUAYU Automotive Systems and KSPG of Germany. (From a press release on April 22, 2015)
-In April 2015, Yanfeng Automotive Trim Systems Co., Ltd., a subsidiary of the Company, and Johnson Controls announced that they have signed a definitive agreement to form a global automotive interiors joint venture. In accordance with this agreement, the joint venture will be called Yanfeng Automotive Interior Systems Co., Ltd., and will be registered in Shanghai Free-Trade Zone. The company will be owned 70 percent by Yanfeng Automotive Trim Systems and 30 percent by Johnson Controls. The new company will integrate Yanfeng Automotive's and Johnson Controls' 90 existing production bases and development centers worldwide to produce instrument panels, cockpit systems, door panels, and floor consoles. The joint venture is scheduled to be inaugurated in July 2015. (From news releases issued by multiple sources on April 12, 2015)
Transfer of Shares
-The Company announced that Yanfeng Automotive Trim Systems Co., Ltd., its subsidiary, will acquire an additional 12.5 percent of Yanfeng Visteon Jinqiao Automotive Trim Systems Co., Ltd. shares from Sky Faith Industries Limited. Yanfeng Automotive Trim Systems will pay USD 90.58 million for this deal. Yanfeng Visteon Jinqiao Automotive Trim Systems Co., Ltd. was established jointly by Yanfeng Automotive Trim Systems, Sky Faith Industries, and Visteon. Yanfeng Automotive Trim Systems owns a 75 percent share in the joint venture, while Sky Faith Industries and Visteon each owns a 12.5 percent share. (From an announcement by the company on March 27, 2015)
-In September 2014, the Company sold all its 47.5% shares in Huayu-Cooper Standard Sealing Systems Co., Ltd. to Cooper-Standard Holdings Inc.. The transaction was finished in February 2015. Upon completion, Cooper Standard became the 95% equity owner of the business, while 5% was retained by the Shanghai Zhaotun Collective Assets Managing Co. (From a press release on February 27, 2015)
New Companies
-Yanfeng Automotive Interiors in the Company's Group announced that it will invest USD 55 million to construct a new plant in Chattanooga, Tennessee. The plant is expected to create approximately 350 jobs. It will begin operating in 2016, and will produce components such as floor consoles, instrument panels, and instrument panel brackets for Volkswagen. Volkswagen plans to begin assembling mid-size SUVs at its Chattanooga plant in late 2016. (From news releases issued by multiple sources on July 21, 2015)
-Yanfeng Automotive Trim Systems (Changsha) Co., Ltd. in the Company's Group held an opening ceremony for its new plant. The plant will supply 300,000 sets of instrument panels and door panels to Shanghai VW’s plant in Changsha per year. (From news releases issued by multiple sources on July 13, 2015)
-The Company announced that the company and Continental of Germany will establish Huayu Continental Brake Systems Co., Ltd., a brake production joint venture, in the Chongqing Liang Jiang New Area, China. The new plant will cover over 80,000 square meters, and will produce brake calipers, vacuum boosters, electric parking brakes, and other brake products. Investment in the first phase of the construction project is expected to reach CNY 600 million. The joint venture will hire over 600 people, and production operations are scheduled to begin in the fall of 2016. (From news releases issued by multiple sources on June 11, 2015)
-On April 10, 2015, Yanfeng Automotive Trim Systems Co., Ltd., a subsidiary of the Company, and Johnson Controls announced that they have signed a definitive agreement to form a global automotive interiors joint venture. In accordance with this agreement, the joint venture will be called Yanfeng Automotive Interior Systems Co., Ltd., and will be registered in Shanghai Free-Trade Zone. The company will be owned 70 percent by Yanfeng Automotive Trim Systems and 30 percent by Johnson Controls. The new company will integrate Yanfeng Automotive's and Johnson Controls' 90 existing production bases and development centers worldwide to produce instrument panels, cockpit systems, door panels, and floor consoles. The joint venture is scheduled to be inaugurated in July 2015. (From news releases issued by multiple sources on April 12, 2015)
-Dongfeng Visteon Wuhan Automotive Trim Systems Co., Ltd., a 50-50 joint venture between DETC and Yanfeng Automotive Trim Systems Co., Ltd., has established a joint-venture company with Grupo Antolin of Spain. The new company is called Dongfeng Antolin (Wuhan) Automotive Trim Co., Ltd. It is capitalized at CNY 20 million, of which 51 percent was invested by Dongfeng Visteon Wuhan Automotive Trim Systems and the remaining 49 percent was provided by Grupo Antolin. The Wuhan facility will produce interior components such as roof trims and door panels. (From an announcement by the company on January 26, 2015)
Come into Operation
-Chengdu Behr Thermal System Co., Ltd., a new subsidiary of the Company, began full-scale production. The first lot of its products would be used on new Jetta and Sagitar. (From news releases issued by multiple sources on March 6, 2015)
-GKN Drive Shaft (Chongqing) Co., Ltd., subsidiary of Shanghai GKN Drive System Co., Ltd., announced that it has held a an opening ceremony at its plant, where it completed the second phase of its construction project. The project involved an investment of nearly CNY 300 million. The plant is capable of producing 1.5 million drive shafts per year. (From news releases issued by multiple sources on January 5, 2015)
Off the Line
-The Changsha Plant of Yanfeng Plastic Omnium Automotive Exterior Systems Co., Ltd., which is a joint venture between Plastic Omnium and the Company, held a ceremony to celebrate the release of its first bumper off its production line. (From news releases issued by multiple sources on January 19, 2015)
Business Plan for Next Year
-In 2016, the Company plans to reach CNY 113.5 billion sales. (From the Company's 2015 annual report)
R&D Expenditure |
(in million yuan) |
| FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | |
| R&D Expenditure | 1,539.73 | 1,649.11 | 1,324 |
| Ratio of R&D expenses to operating income | 1.69% | 2.23% | 1.91% |
R&D Facility
-As of the end of 2015, the Company has 74 manufacturing (including R&D) base in the United States, Germany, Thailand, Russia, Australia, the Czech Republic, Slovakia, India, Mexico, Canada and other countries.
New Product
-Shanghai GKN HUAYU Driveline Systems Co., Ltd., subsidiary of the Company, developed a complete all-wheel drive (AWD) system with GKN Driveline and will supply to SAIC Motors' new MG GS compact SUV.(From a press release on April 23, 2015)
Capital Investment Projects |
(as of Dec. 2015) |
| Project | Planned amount of investment (in million yuan) | Investment made in 2015 (in million yuan) | Percentage of total input |
| Retooling spring production facility at China Spring Corporation Limited | 125.24 | 40.48 | 95% |
| PXE series technology transformation at Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd. | 23.08 | 6.06 | 99% |
| Expanding production capacity of compressors at Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd. | 51.93 | 11.69 | 93% |
| Stamping project in Yantai subsidiary of Shanghai Superior Die Technology Co., Ltd. | 700.00 | 157.19 | 80% |
| Thermoforming project in Shanghai Superior Die Technology Co., Ltd. | 166.00 | 71.46 | 64% |
| Stamping transformation projects at Shanghai Tractor & Internal Combustion Engine Co., Ltd. | 667.60 | 97.12 | 30% |
| Stamping transformation projects in Wuhan Jiezhong Auto Parts Co., Ltd., subsidiairy of Shanghai Tractor & Internal Combustion Engine Co., Ltd. | 187.53 | 89.82 | 57% |
| Project of plant construction at Shanghai Union Automobile & Tractor Industry Trade Co., Ltd. | 179.08 | 62.39 | 83% |
| Plant construction at Shanghai Automotive Brake Systems Co., Ltd. | 40.95 | 3.42 | 100% |
| Interior parts production line renovation project at Yanfeng Visteon | 1,194.10 | 1,554.07 | 83% |
| Electronic parts production line reconstruction project at Yanfeng Visteon | 60.77 | 136.89 | 77% |
| Seat parts production line reconstruction project at Yanfeng Visteon | 1,338.95 | 467.99 | 89% |
| Plant construction in Hai'an at Shanghai Sandmann Foundry | 1,182.21 | 208.74 | 20% |
Investment in China
-Shanghai GKN HUAYU Driveline Systems Co., Ltd. (SDS), a Chinese joint venture between GKN Automotive and the Company, is investing USD 850 million over the next five years to meet growing demand for the company's driveline systems, all-wheel drive (AWD) and hybrid technologies. Construction of a large, new 22,000 square meter technical center in Shanghai for the joint venture is due to complete in December 2015. The facility will provide research and development capability for complete driveline systems, including vehicle integration, software development and vehicle testing capabilities. The company's production capacity will also be substantially increased in plants across Shanghai, Chongqing, Wuhan, Changchun and Yizheng, with a new assembly plant planned in Chengdu. GKN Powder Metallurgy will also expand its production capacity with a new plant in Danyang, due to open later this year. (From a press release on April 19, 2015)