Layout of production facilities

-The Company established several production facilities in recent years. Up to now, the Company has already built facilities in Ningbo, Changchun, Chendu, and Tianjin. Construction of the Shanghai and Nanjing production facilities has already begun. At the same time, the Company is implementing its plan to build facilities in Southern and Central China.

Orders

-In 2011, the Company started to mass produce door panels and rear mirrors for Shanghai VW's New Passat; dashboards and pillars for Shanghai VW's Lavida; triangle windows and metal parts for FAW VW's Audi Q5; and wooden interior trims for the BMW Brilliance. The Company received new orders from Shanghai VW to supply rear mirrors and pillars for the Skoda Yeti; from FAW VW to supply roof trims and stamping parts for the Golf A7; and to supply roof trims, wooden trims and triangle windows for the Audi Q3;, and from Brilliance BMW to supply roof trims and wooden trims for BMW 3 series. The Company is developing those products in accordance with customers' requirements. (From the Company's 2011 annual report)

Joint-ventures

Yangzhou Antolin Huaxiang Automobile Products Co., Ltd.
-The Company and Grupo Antolin Irausa, S.A. of Spain will establish a 50-50 joint-venture company in Yizheng, Jiangsu. The new company, Yangzhou Antolin Huaxiang Automobile Products Co., Ltd. (tentative name), will be capitalized at 6.4 million euros. Total investment is expected to reach 12.8 million euros. The joint venture will design, develop, manufacture and sell automotive interior products such as door panels, door modules and A- and B-pillars, targeting China and some international markets. It is planning to start operations in 2012 with a production volume of 468,000 sets a year. Sales and income are expected to reach 320 million yuan and 10 million yuan, respectively. In May 2008, the Company and Grupo Antolin Irausa formed Ningbo Antolin Huaxiang Automobile Products Co., Ltd. in Huaxiang, Ningbo, business of which has been going smoothly. The new company in Yizheng will allow the partners to increase their supply to the Nanjing Plant and the Yizheng Plant of Shanghai VW. (From a press release, May 13, 2011)

Ningbo ABC Inoac Huaxiang Automobile Products Co., Ltd.
-On March 21, 2011, Ningbo Inoac Huaxiang Automobile Products Co., Ltd. (a joint venture between the Company and Inoac Corporation) and the Hong Kong unit of the Canada-based ABC Group signed an agreement to establish a 50-50 joint venture in China. Ningbo Inoac Huaxiang and ABC will each invest 1.05 million US dollars in the new company, which is called Ningbo ABC Inoac Huaxiang Automobile Products Co., Ltd. Using ABC’s high level of expertise, the joint venture company will produce and sell air intake systems and their components in the Shanghai area as well as protective covers for rack and pinion boots and constant velocity joint (CVT) boots in other parts of China. (From an announcement by the company, March 23, 2011)

Changchun Huaxiang Faurecia Automotive Plastic Components Co., Ltd.
-Faurecia AG and Ningbo Huazhong Plastic Products Co., Ltd. of China signed an agreement to form a 50/50 joint venture which manufactures automotive exterior parts. The new entity, Changchun Huaxiang Faurecia Automotive Plastic Components Co., Ltd. is based on the existing plant of Changchun Huaxiang Automotive Plastic Manufacture Co., Ltd., a subsidiary of Ningbo Huazhong Plastic Products. The new joint venture will carry on Changchun Huaxiang's current bumper systems business for FAW-VW's Volkswagen Magotan (the Chinese Passat) vehicle assembled at FAW-VW's Changchun plant. Furthermore, Changchun Huaxiang Faurecia was recently awarded additional automotive exteriors business from FAW-VW for the new Audi A6. The new entity will be the first joint venture for the automotive exteriors activity of Faurecia in China. (From a press release on January 24, 2011)

New Subsidiaries

Wholly owned subsidiary to Be Established in Germany
-The Company will establish a wholly owned subsidiary in Germany to gather information on the European market, introduce advanced technology and enter into the global market. Investment in the new company is expected to reach 5 million euros. (From an announcement by the company, May 13, 2011)

Two new subsidiaries: one in Chengdu and Fuzhou
-The Company will establish two new subsidiaries: one in Chengdu, Sichuan Province and the other in Fuzhou, Fujian Province. The company in Chengdu will be capitalized at 10 million yuan, which will be fully invested by the Company. Establishing this subsidiary will allow the Group to expand business in the Chengdu area and enhance support especially to the Chengdu Plant of FAW-VW. The subsidiary in Fuzhou will have a registered capital of under 60 million yuan, of which 99 percent will be funded by the Company, and the remaining 1 percent by its subsidiary. The new subsidiary will enable the Group to strengthen its services to local automakers such as Soueast Motor and Fujian Daimler. The plant will be constructed on approximately 66,000 square meters of land at the Fuzhou Qingkou Investment Zone. the Company is investing up to around 20 million yuan in the new plant, aiming to begin production operations at the end of 2012. (From an announcement by the company, January 19, 2011)

Acquisitions

Acquiring three subsidiaries of Sellner Holding GmbH 
-The Company has decided at a board meeting that it will acquire three subsidiaries of Sellner Holding GmbH of Germany. Sellner Holding is a major manufacturer of wooden car interior products for luxury vehicles, supplying its products mainly to BMW, Volkswagen, Audi, General Motors and Mercedes Benz. Although, it had the second largest share in the global market, Sellner filed for bankruptcy in January 2011. Ningbo Huaxiang will pay 18.7 billion euros for Sellner GmbH and its plastic interior parts subsidiary IPG Industrieplast GmbH. It will acquire Sellner Corporation in the U.S. for 2.6 million euros. The company will also purchase Wech CHEB spol. sr.o., which is one of the major suppliers to Sellner GmbH, for 6 million euros. (From a press release, November 11, 2011)

Acquiring additional shares of two joint-ventures
-The Company has decided at a board meeting on August 3, 2011 that it will acquire additional shares of stock in the following two joint-venture companies.
1. It will purchase the remaining 25 percent shares in Ningbo Merkt Automotive Decorative Parts Co., Ltd. from Merkt of Germany, its joint venture partner. The Company, which currently has a 75 percent ownership in the joint venture, is going to pay 3.85 million euros for the deal. Ningbo Merkt Automotive Decorative is the sole Chinese company that is manufacturing walnut- and natural-wood-based interior components for medium- and luxury-class vehicles. Its sales destination, however, was quite limited based on a joint venture agreement, which has prevented Ningbo from actively cultivating new markets especially overseas. In this regard, Ningbo intends to achieve a breakthrough with the acquisition. In order to relegate share transfer procedures to its own German subsidiary and increase efficiency, Ningbo will also increase the capital in the subsidiary from the current 5 million euros to 9 million euros.
2. The company will purchase 25 percent shares of stock in its joint venture, Ningbo Miller Mould Manufacturing Co., Ltd., from its partner, DZZ of Germany. Prior to the company’s decision, DZZ had said it would withdraw from the joint business, citing its inability to generate a targeted level of profit. How much Ningbo Huaxiang Electronic will pay for the transaction is unknown. (From an announcement by the company, August 4, 2011)

Business Expansion
-The Company and Faurecia have agreed to expand business at Faurecia (Changchun) Exhaust System Co., Ltd., which was established as a joint venture between Huaxiang Car Muffler Changchun and Faurecia Abgastechnik GmbH in 1996. The joint venture is capitalized at 34.70 million yuan, 49 percent of which was provided by the Company and 51 percent by Faurecia. It supplies exhaust systems for passenger vehicles made at the Changchun Plants of FAW-VW and FAW Car. Sales for 2010 totaled 1,790 million yuan. 
The two partners agreed on the following projects:
1) Faurecia (Changchun) Exhaust System will exclusively supply its exhaust systems to FAW’s plants in Chengdu, Foshan, Liuzhou and Tianjin in addition to supplying them to FAW’s other facilities;
2) Faurecia (Changchun) Exhaust System will become the sole supplier of exhaust systems to FAW-Toyota, BMW Brilliance, Brilliance Auto, Shenyang GM and Hafei Motor in Northeast China;
3) Faurecia (Changchun) Exhaust System will start supplying its products to carmakers other than Hyundai Motor and commercial vehicle manufacturers in northern China. 
(From a press release, May 11, 2011) 

R&D Facilities

-Ningbo City Auto Plastic Mould Provincial Level R&D Center 
-Ningbo Huaxiang Auto Research and Design Institute 
-Shanghai Huaxiang Auto Parts Design Co., Ltd.

R&D Expense

Product Development

-In 2011, the Comapny developed 1,562 products and was awarded a project to develop wooden trims for BMW and Volvo. (From the Company's annual report)

Investment in China

-The Company decided at a board meeting held on September 28, 2011 that it will change the purpose of the funds that it raised from issuing new shares of unquoted securities. The company, which originally intended to invest in new equipment to manufacture seat cushions and headrests for passenger vehicles, will spend the funds instead on establishing production lines to make walnut interior trims for luxury vehicles. Investment in this project is expected to total around 152 million yuan with the annual production capacity expected to reach 150,000 sets. A major factor behind the shift in the plan is the low level of cost efficiency in the seat product segment in connection with increasing safety requirements, which is extending the time needed until the company becomes ready for mass production. (From an announcement by the company, September 29, 2011)

-The Company will establish two new subsidiaries: one in Chengdu, Sichuan Province and the other in Fuzhou, Fujian Province. The company in Chengdu will be capitalized at 10 million yuan, which will be fully invested by the Company. The establishment will allow the Group to expand business in the Chengdu area and enhance support especially to the Chengdu Plant of FAW-VW. The subsidiary in Fuzhou will have a registered capital of under 60 million yuan, of which 99 percent will be funded by the Company, and the remaining 1 percent by its subsidiary. The new subsidiary will enable the Group to strengthen its services to local automakers such as Soueast Motor and Fujian Daimler. The plant will be constructed on approximately 66,000 square meters of land at the Fuzhou Qingkou Investment Zone. the Company is investing up to around 20 million yuan in the new plant, aiming to begin production operations at the end of 2012. (From an announcement by the company, January 19, 2011)

-In 2011, the total investment of the company is 379.05 million yuan, with an year-on-year increase of 76.40%. (From the Company's annual report)