Overview

-The Company launched a plant construction project in Zhuzhou, Hunan Province in a move to expand its presence into southern China. In addition to supplying its products to the Beijing Automotive Group, it has been increasing its business with other Chinese automakers as well.

-In recent years, the Company has been placing emphasis on its Module products segment.

-The Company’s sales increased by 94.76% from 8 billion yuan in 2010 to 15.6 billion yuan in 2011.

Contracts

-Beijing Gear Works will start supplying two new types of spiral bevel gears to John Deere, a major tractor manufacturer in the U.S. Beijing Gear Works is now stepping up its agricultural machinery parts business in the global market, while maintaining its share in the auto parts market. (From a press release, August 31, 2012)

-Beijing Gear Works in the Beijing Automobile Group has been awarded a program from Russia to supply 10,500 transmissions for light-duty vehicles. The company’s proprietary transmission, which was specially designed to meet the climate conditions in Russia, is suitable for use on light-duty, off-load vehicles. The technology, which is already featured on nearly 30,000 vehicles running on Russian roads, is well received by its users in the country. （From news releases issued by multiple sources, August 10, 2012）

-Beijing Beiqi Mould & Plastic Technology Co., Ltd., a joint-venture company between Beijing Hainachuan Automotive Parts Co., Ltd. and Jiangnan Mould & Plastic Technology Co., Ltd., was awarded a program to supply 20 products for the Beijing Hyundai HS. These products include bumpers, battery trays and door sills. Prior to winning the contract, the company was already supplying components for the RC and the MCC. The new program reflects Beijing Hyundai’s acknowledgement of the joint venture as a first-class supplier and is expected to lead to increased business for Beijing Beiqi Mould & Plastic Technology. (From a press release, April 5, 2012) 

-Beijing Beiqi Mould & Plastic Technology Co., Ltd., a joint-venture company between Beijing Hainachuan Automotive Parts Co., Ltd. and Jiangnan Mould & Plastic Technology Co., Ltd., was awarded a bumper sequencing contract from Beijing Benz. The company supplied bumper modules for the automaker’s 204 model from April 2012 through August 2012. The company intends to form a full-scale partnership with the customer in the future. (From a press release, April 15, 2012) 

Joint Venture
-On August 28, 2012, the Company and Beijing Goldrare Automobile Parts Co., Ltd. signed an agreement to establish a 50-50 joint venture company in Zhuzhou City, Hunan Province. The new company will be capitalized at 26 million yuan. It will produce automotive seats at Beijing Hainachuan’s Zhuzhou Plant for installation on Beijing Automobile vehicles. The joint venture will have the capacity to produce seats for 150,000 vehicles a year initially.Depending on the level of demand, the joint venture may invest additional capital to raise the production capacity to 300,000 sets annually and also start production of seat frames.(From a press release, August 29, 2012)

-The Hella Group announced that it had reached a cooperation agreement for a planned joint venture with BAIC. Both partners expected to finalize the joint venture by the end of 2012. Hella planned to involve its Chinese partner BAIC, via its subsidiary BHAP, as an equal partner in Hella Beifang Automotive Lighting Co. Ltd. (HBL), its subsidiary in Beijing. Prior to the agreement, HBL had concentrated primarily on lighting and electronics applications for commercial vehicles in the area of Special Original Equipment (Special OE). The goal of the partnership is to use Hella’s available production and development capacities to expand the location into a full service provider for passenger car illumination. (From a press release on June 1, 2012)

Market expansion

Beijing Plant

-In September 2012, Beijing Beiqi Mould & Plastic Technology Co., Ltd., a joint venture between Beijing Beiqi Mould & Plastic Technology Co., Ltd. and Jiangnan Mould & Plastic Technology Co., Ltd., held a ceremony to celebrate the start of operations of its new plant in the Daxing District. The facility is equipped with cutting-edge manufacturing devices such as an environmentally-friendly, aqueous-spray coating system. (From a press release, November 7, 2012)

Beijing Yizhuang Auto Parts Production Hub

-In January 2012, the Company and the Beijing Yizhuang Development Zone held a signing ceremony for the establishment of an auto parts production hub to support Beijing Benz. The new production hub, which will be named the BBAC Supplier Industrial Park, will be set up on a site across from the Yizhuang Plant belonging to Beijing Benz. The Yizhuang plant is planning to increase its annual production volume to over 400,000 vehicles by 2015. The establishment of the production hub will help the automaker increase local sourcing, accelerate research and development activities, and reduce delivery costs from parts manufacturers. Beijing Johnson Controls Automotive Components Co., Ltd., Beijing Lear Automotive E&E Parts CO., Ltd., Beijing Beiqi Mould & Plastic Technology Co., Ltd. and other subsidiaries of Beijing Hainachuan will be locating their plants at the new industrial park. In addition, four or five other parts manufacturers have expressed intentions to collaborate with Beijing Hainachuan. (From a press release, February 20, 2012)

Partnership with non-Beijing Automotive Group companies

Baotou North-Benz Heavy-Duty Truck Co., Ltd.

-Beijing Lear Automotive E&E Parts Co., Ltd., Beijing Beiqi Xinhua Auto Springs Co., Ltd., Yanfeng Visteon (Beijing) Automotive Trim Systems Co., Ltd., and Beijing Hainachuan Xiezhong Air-conditioning Co., Ltd, subsidiaries of the Company, all became suppliers for Baotou North-Benz Heavy-Duty Truck Co., Ltd. Prior to this announcement, only Yanfeng Visteon (Beijing) Automotive Trim Systems was a strategic supplier for Baotou North-Benz Heavy-Duty Truck. Previously, the Company was working with JAC Automobile, Geely Volvo, and Changan Automobile in discussing supplier opportunities. The Company had given quotations for many products and started development on products with other car makers prior to this partnership. (From a press release on Jan. 30, 2012)

Recent development

-The Company established a collaboration mechanism with car makers for Beijing Automotive Group’s internal market to prioritize the simultaneous development of various automotive components. These components included dashboards, leaf springs, drive shafts, steering gear control systems, CDs, brakes, transfer gears, wire harnesses, seats, sunroofs, air conditioners, and panels. This was done in cooperation with SAIC Motor and Beiqi New Energy Co., Ltd. with the intent to develop, supply, and deliver parts and modules in an improved manner. (From a press release on January 30, 2012 )

-From mid-May 2011 to the end of July 2011, the Company’s modular products research and development team was able to successfully assemble a BAIC C70.

-Until recently, the Company worked on 7 major modules in synchronization with BAIC’s own brand models to achieve a clean supply chain between supplier and automaker. Presently, the Company is cooperating with other customers in studying modular R&D. In the future, the Company hopes to have its business centered on modular products.

-The Company, through the opportunity and additional freedom from BAIC developing its own vehicles such as the C70, was able to focus on the R&D and product launch of various automotive modules. These modules included front and rear suspension modules, cockpit modules, bumper modules, tire modules, exhaust modules, and front-end cooling modules. These module projects were completed by separate Company subsidiaries including as Beijing Asia-Pacific Chassis, Yanfeng Visteon (Beijing), Tenneco (Bejing) Ride Control System, Beijing Beiqi Mould & Plastic Technology, and Hainachuan Beijing Branch.

Construction of new wheel hubs plant

-On December 18, 2012, the Beijing Automotive Group and Taian Qicheng Wheel Manufacturing Co., Ltd. signed an agreement regarding construction of a new plant to produce wheel hubs in Taishan, Taiaan City, Shandong.