Beijing Automotive subsidiary to double annual sales by 2010

BEIJING -- Beijing Hainachuan Automotive Parts Co., the supplier subsidiary of Beijing Automotive Industry Holding Corp., targets to double its annual sales to 10 billion yuan ($1.4 billion) by 2010.

Sales of the subsidiary are estimated to be 4.6 billion yuan ($666.7 million) in 2008, says Liu Yinan, general manager of Hainachuan.

In order to join the ranks of Shanghai Automotive Industry Corp. to become a major domestic auto manufacturing group, Beijing Automotive established Hainachuan in late 2007 to revamp its weak supplier base.

To date, Beijing Automotive has injected nearly all its auto parts supply business into Hainachuan.

Hainachuan currently operates 12 joint ventures and 11 wholly owned auto parts supplying companies. These companies supply products ranging from seats, door panels, air conditioners, leaf springs to starters.

Of the 12 joint ventures, nine were owned by Hainachuan and global suppliers such as Delphi Corp., Lear Corp., Johnson Controls Inc., Visteon Corp. and BorgWarner Inc.

To double its sales over the two years, the company is seeking to cooperate with more international suppliers.

Hainachuan will set up a new joint venture with Tenneco Inc. to produce emission control systems later this year, says Liu. The two sides now have a joint venture making shock absorbers.

Moreover, the company is discussing partnerships with some leading global suppliers to manufacture components such as steering systems and rearview mirrors.

Liu declines to name these suppliers. "For each product, we choose to partner with the best global supplier," he says.

At present, parts supplied to Beijing Automotive and its joint venture automakers with Hyundai Motor Corp. and DaimlerChrysler AG make up about 15 percent of Hainachuan's total sales.

Liu expects the percentage to rise to 30 percent by 2010.

Meanwhile, Hainachuan is also seeking to strengthen its business ties with automakers in the Bohai Bay Rim area spanning Hebei, Shandong, Tianjin and Liaoning provinces.

This area is home to some domestic automakers such as Great Wall Motor Co. and Shenyang Brillance JinBei Automotive Co.

Liu says exports from Hainachuan's subsidiaries and joint ventures will exceed 50 million yuan ($7.1 million) in 2008.

The export products include safety belts to Russia from its joint venture with Dephi, and shock absorbers to General Motor's North America operations from its existing joint venture with Tenneco.