News and Research on China Yuchai International Limited (CYD)
Business Description
China Yuchai International Limited, through its subsidiary, Guangxi Yuchai Machinery Company Limited (Yuchai), engages in the manufacture, assembly, and sale of diesel engines in the People’s Republic of China (the PRC). The principal markets for Yuchai’s diesel engines are truck manufacturers in the PRC. The Company owns, through six wholly-owned subsidiaries, 76.4% of the outstanding common shares of Yuchai.
Products
Yuchai primarily manufactures and sells diesel engines for medium-duty trucks in China. Yuchai’s primary products are its 6105 and 6108 medium-duty engines, which are principally used in medium-duty trucks with a load capacity of five to seven tons. In addition, Yuchai also offers the 4-Series light-duty engines and the 6112 heavy-duty engines.
Medium-Duty Diesel Engines
6105 Engines: The 6105 medium-duty engine is a six-cylinder, four-stroke engine that offers up to 230 horsepower, and is principally installed in medium-duty trucks.
6108 Engines: The 6108 engine offers improved overall performance compared to the 6105 engine. Yuchai began offering the 6108 engine to its customers as a premium model, along-side its standard 6105 engine, and plans to replace the 6105 engine with the 6108 engine.
Heavy-Duty Diesel Engines
The 6112 heavy-duty engine: The 6112 heavy-duty engine is a six-cylinder, four-stroke engine with a rated power ranging from 190 to 270 horsepower.
The 6L and 6M heavy-duty diesel engines: The 6L and 6M heavy-duty diesel engine are six-cylinder, four-stroke engines with a rated power ranging from 280 to 390 horsepower.
Light-Duty Diesel Engines
The 4-Series engines: The 4-Series engines include: the 4110Q engine which is suitable for light vehicles and agricultural trucks; and The 4110ZQ engine is suited for light commercial vehicles and medium-size passenger vehicles.
Other Products
Diesel Power Generators: Yuchai produces diesel power generators which are primarily used in the construction and mining industries. The diesel power generators offer a rated power of 12 kilowatts to 160 kilowatts. Yuchai’s diesel power generators use both the 6105 and 6108 medium-duty engines as their power source.
Diesel Engine Parts: Yuchai supplies diesel engine parts to its nationwide chain of customer service stations.
Sales and Marketing
Yuchai distributes majority of its engines directly to auto plants and retailers from its primary manufacturing facilities in Yulin City. In addition, Yuchai operates 31 regional sales offices in principal geographic regions in China. Yuchai provides a range of services to its customers, including dispatching engineers to provide on-site assistance to major customers in the resolution of technical problems. Vietnam, Saudi Arabia, Taiwan, Cuba and Kazakhstan represented Yuchai’s major export markets in 2005.
Customer Service
Yuchai, in addition to various services provided initially at its sales offices, has a nationwide network of approximately 1,150 authorized service stations that provide repair and maintenance services, spare parts, retrofitting services and training to Yuchai’s customers. In addition, Yuchai also owns and operates over 20 repair training centers.
Customers
The Company’s sales are concentrated among the Dongfeng Group, which includes the Dongfeng Automobile Company, a state-owned automobile company in China, and other major diesel truck manufacturers controlled by or affiliated with the Dongfeng Automobile Company. In 2005, the Company’s major customer included the Dongfeng Group. Its customers also included Liuzhou Dongfeng Automobile and Hubei Dongfeng Automobile.
Suppliers
The Company’s supplier includes Yuchai/ASIMCO Components Company Limited.
Competition
The Company's major competitor includes The Dongfeng Group. It also identifies competition from Weichei Power Co., Ltd. In light-duty diesel engine market, Yuchai competes primarily against Wuxi Diesel Engine Factory First Auto Group and Dalian Diesel Engine Factory First Auto Group (the First Auto Group).
Acquisitions
In March 2005, the Company acquired 14.99% of the common stock of Thakral Corporation Limited (TCL). TCL is a company involved in the manufacture, assembly and distribution of high-end consumer electronic products and home entertainment products in the PRC. The Company acquired additional 1.00% of the common stock of TCL in September 2005.
In February 2006, the Company through its wholly-owned subsidiaries acquired debt and equity in LKN-Primefield Limited (LKN). LKN is primarily engaged in the business of investment holding, and the principal business activities of LKN’s subsidiaries are those of hospitality-related businesses in Asia.
History
China Yuchai International Limited was founded in 1951.
