Business Report FY ended Dec. 2013

Business Highlights

Financial Overview

(in millions USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 Rate of Change (%) Factors
Sales 415.16 336.01 23.56% -Increased sales of newly developed products for North America;
-Continuing growth of automotive market demand in China
Operating Income 36.72 27.80 32.09% -
Ordinary Income 38.24 27.06 41.32% -
Net Income 33.07 25.49 29.74% -

Major Contracts

-The Company's subsidiary, Jingzhou Henglong Automotive Parts Co., Ltd., entered into a multi-year agreement to supply the SAIC-GM-Wuling ("SGMW") joint venture with its high-quality rack and pinion power steering systems. The Company has commenced shipments, with the steering units intended to be installed primarily in SGMW's Wuling Hongguang brand, the best selling multi-purpose vehicle in China. Based on the rate of orders, the Company could supply approximately 350,000 steering systems to SGMW in 2013. (From a press release, May 2, 2013)


-On June 5, 2013, the Company won the Chrysler 2013 Supplier of the Year award in the Metallic category at the 2013 Annual Strategy Meeting and Supplier Awards Ceremony held at the Palace of Auburn Hills. It was the sole winner in the Metallic category. (From a press release, June 19, 2013)

-The Company won the 2012 Annual Chrysler China Regional Excellent Supplier Award at the Chrysler Excellent Supplier Award Conference in Xiamen, China. The Company also received Chrysler's second place award in the Global Metal Product Supplier category. (From a press release, January 30, 2013)


R&D Expenditure

-The Company's R&D spending in 2013 was USD 20.9 million, a 40.3% increase from the previous year's figure of USD 14.9 million. This increase in spending was mainly due to the development and trial production of electric power steering (EPS). Expenses for mold improvement increased by USD 1.0 million, external technical support fees increased by USD 0.9 million, salary and wage expenses of research and development related staff increased by USD 4.1 million.

R&D Structure

-The Company owns a Hubei Provincial-Level technical center, called the Jingzhou Henglong Automotive Technology (Testing) Center, which has been approved by the Hubei Economic Commission. The center has a staff of about 306 employees that primarily focus on steering system R&D, testing, improvements in production processes, and new applications for various materials and production methodologies.

-The Company has partnered with Tsinghua University to establish a steering system research center, called Tsinghua Henglong Automobile Steering Research Institute, for the purposes of R&D and electric power steering experimentation.

-On January 28, 2013, the Company announced that its subsidiary Jingzhou Henglong Automotive Technology (Testing) Center Laboratory recently received national accreditation from the China National Accreditation Service (CNAS), making it the only such approved lab among power steering companies. (From a press release, January 28, 2013)

Technological Alliance

-The Company had or currently has the following technological agreements:
  • Bishop Steering: From 2006 to 2012, the Company had a licensing agreement with Bishop Steering Technology Limited, a leader in automotive steering gear technology innovation which offers advanced technology for steering valves. The agreement was not renewed in 2013 as the Company had the capabilities to develop its own steering valves.
  • Nanyang Ind. Co. Ltd.: The Company signed a technology transfer agreement with Nanyang Ind. Co. Ltd., a leading steering column maker, for the technology necessary to develop electronic power steering systems.
  • Korea Delphi Automotive: The Company signed a technology licensing agreement with Korea Delphi Automotive Systems Co., Ltd.


-The Company has over 85 Chinese patents.

Investment Activities

Capital Expenditure

(in millions USD)
Company Name FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Jingzhou Henglong Automotive Parts 8.07 14.47 8.46
Shashi Jiulong Power Steering Gears 0.67 3.12 6.97
Shenyang Jinbei Henglong Automotive Steering System 0.45 0.58 1.87
Wuhu Henglong Automotive Steering Systems 0.76 0.40 1.12
Hubei Henglong Automotive System Group (Formerly Jingzhou Hengsheng Automotive System) 4.24 2.07 0.60
Other Sectors (1) 1.04 1.07 1.01
Total Segments 15.24 21.71 20.03
Eliminations (0.37) (3.20) (5.80)
Total 14.87 19.08 15.18

(1) The companies in the Other Sectors category include Wuhan Jielong Electric Power Steering Co., Ltd.; Universal Sensor Application, Inc.; Chongqing Henglong Hongyan Automotive Systems Co. Ltd.; Beijing Hainachuan Henglong Automotive Steering System Co., Ltd.; Henglong USA Corporation; and CAAS Brazil's Imports & Trade in Automotive Parts Ltd.