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After robust year, diesel engine makers bullish about future

China’s production and sales of diesel engines reached record highs of 3.94 and 3.99 million units respectively in 2010, according to data from the China Internal Combustion Engine Industry Association (CICEIA).

Thanks to better than expected market growth of commercial vehicles, especially that of heavy-duty trucks, virtually all major players in the diesel engine industry enjoyed some level of growth in 2010. The top three players – Yuchai, FAW (Wuxi Diesel and Dalian Diesel) and Weichai – sold a combined 1.74 million diesel engines, or 43.5 percent of the market. Other players such as Quanchai, Dongfeng Cummins and Dongfeng Chaoyang Diesel saw sales top 220,000 units.

In the first two months of this year, China sold 728,269 diesel engines, up 7.83 percent year-on-year. The top 10 diesel engine makers sold 625,603 diesel engines, accounting for more than 85 percent of the market.

Buoyed by the positive market performance and near-term prospects, leading players are strengthening their market positions through measures such as capacity expansion and product structure adjustment and upgrade (such as development of State IV/V emissions-compliant engines and engines with higher displacement).

The following is a roundup of major diesel engine manufacturers in 2011 and beyond.

Yuchai: first to commercialize State V diesel engines

Yuchai Group, China’s largest diesel engine maker, is the first in the industry to commercialize State V engines. It received an order of 100 such engines from the Beijing Public Transportation Holdings last year, half of which were already in operation in public buses operated by BPT since November 2010.

Yuchai sold 749,671 engines last year with sales revenues of ¥20.5 billion ($3.11 billion), up 11.13 and 27.62 percent respectively year-on-year. Its core engine subsidiary, Yuchai Machinery Co., Ltd., sold 551,596 diesel engines in 2010 and a combined 2.06 million units during the 11th Five-Year Plan period (2006-2010).

Yuchai currently makes diesel engines ranging from 110-441 kW under five major product series: 6A, 6L, 6M, 6K and 6T. It began development of State V engines in 2005 and unveiled China’s first State V diesel engine in 2007. It has primarily adopted SCR technology to achieve State IV/V compliance for its diesel engines, some of which, including the YC6K, are even capable of being upgraded to satisfy State VI emission standards.

Yuchai Machinery is targeting sales of 680,000 diesel engines this year, while Yuchai as a group is eyeing annual sales of 1.6 million diesel engines with sales revenues of over ¥100 billion by 2015. It will primarily focus on supplying the heavy-duty truck, engineering machinery, tractor and shipbuilding industries during this period.

Weichai: monthly output capacity to hit 100,000 units by June

Weichai, which sold 447,000 diesel engines last year, ranking third after FAW’s Wuxi Diesel and Dalian Diesel combined, is the most comprehensive diesel engine maker in China.

It currently offers more than 1,000 types of diesel engines covering power range of 8-2,250 kW under 10 major model series. Its 10-liter and above engines account for 80 percent of China’s 15-ton and above heavy-duty vehicle market. Its flagship Landking WP series is already capable of meeting State V requirements. In 2011, it is expected to launch a 13-liter engine series based on the WP12 platform, with horsepower of over 500 and capable of meeting State III, IV and V requirements, through the adoption of common rail plus SCR technologies. The company claims that it currently offers the most dependable Euro III diesel engine on the market.

Last year, Weichai invested ¥5 billion to build 11 plants, most of which are already in operation. By June of this year, monthly output capacity of diesel engines would reach 100,000 units.

Last June, Weichai announced a strategic goal of “Becoming World’s No. 1” and a “5810” project, which calls for sales revenues of ¥50 billion by 2012, ¥80 billion by 2015 and ¥100 billion by 2020. Sales targets of 4L-15L engines by 2015 and 2020 are respectively 1.5 and 2 million units.

FAW Wuxi Diesel: various measures to higher engine sizes

FAW Jiefang Automobile Co., Ltd. Wuxi Diesel Engine Works, which primarily supplies trucks produced by FAW Jiefang, China’s leading heavy-duty truck maker, sold 436,000 diesel engines in 2010 with revenues of over ¥10 billion.

The company currently makes products covering 40-500 hp and 2L-13L under seven major product series of W, X, K, F, L, M and N for light, medium and heavy-duty truck applications. It has resorted to both common rail SCR and SCR+EGR+POC technologies to achieve State III or IV compliance and has the capability to reach State V.

The company has invested in a new production base for its large engine products CA6DM (11L) and CA6DN (13L), which will have a combined output capacity of 100,000 units by 2012. And for the next five years, the company will implement a so-called “6518” strategy, which calls for annual sales of 650,000 engines and revenues of ¥18 billion by 2015.  

Deutz FAW (Dalian) Diesel: State IV a focus

Deutz FAW (Dalian) Diesel Engine Co., Ltd., a 50:50 joint venture between Deutz AG of Germany and FAW Group, sold more than 110,000 engines in 2010, the most it has sold in a year since its founding in 2007. The company currently makes more than 300 models of diesel engines with horsepower ranging from 80-340 under C, E, F and Deutz platforms for light, medium and heavy-duty truck applications.

 In 2011, Deutz FAW (Dalian) Diesel is expected to focus investment on the development of State IV emission-compliant engines. By 2015, it is expected to realize annual sales of 300,000 diesel engines, sales revenues of ¥10 billion and profit before tax of ¥500 million.

Quanchai: remains No. 4 in rankings

Anhui Quanchai Group Corp. sold 446,000 diesel engines in 2010, up 22.58 percent from 2009, remaining as the country’s fourth largest diesel engine maker by sales volume.

The company, which was founded in 1949 and owns subsidiaries including the public-listed Quanchai Power Co., Ltd., its principle engine making subsidiary, currently has annual output capacity of half a million diesel engines. It is currently executing its so-called “3040” strategy, which calls for annual sales of 300,000 multi-cylinder engines by 2012. On the emission-compliance front, it is developing State IV and V emission-compliant engines under its four major engine series of 4B1, 4B2, 4D1 and 4D2, through the adoption of both EGR and SCR technologies, in addition to high-pressure common rail technology.

In terms of cooperation, there have been rumors that Yuchai, Weichai and Dongfeng Cummins may become strategic consolidators of Quanchai.

Dongfeng-Cummins: 220,000 engines sold in 2010

Dongfeng-Cummins Engine Co., Ltd. (DCEC), the 50:50 joint venture between Dongfeng Motor Corp. and Cummins, sold 226,000 engines in 2010.

It mainly produces Cummins B, C, L series mechanical and ISDe, ISLe and ISZ electronically controlled diesel engines, as well as B series natural gas engines, covering sizes from 3.9L to 13L and horsepower range of 125-545, satisfying State II, III and IV standards.

It primarily supplies light, medium and heavy-duty truck makers, as well as large and medium tourist/public transport buses, engineering machineries and generators. Major customers in the heavy-duty vehicle sector include Hualing Auto, Yutong and Xiamen King Long.

Chaoyang Diesel: sales top 220,000 units for first time

Dongfeng Chaoyang Diesel Engine Co., Ltd. sold more than 220,000 engines in 2010, the first time the company has achieved the annual sales feat.

It currently produces engines covering a power range of 40-180 kW under five major product platforms, including the 4102 series covering 100-120 kW which already meets State IV requirements.

By the end of 2009, all engines produced by the company satisfied State IV requirements and pre-research and development work on State V engines began. It has adopted both EGR+POC and SCR technologies to achieve State IV compliance.

SDEC: new commercial powertrain base under SAIC

Shanghai Diesel Engine Co., Ltd. (SDEC), which became a wholly-owned subsidiary of SAIC Motor in 2008, has been focusing on moving its product applications from the engineering machinery sector to both heavy-duty vehicles and engineering machineries. SDEC will eventually become a powertrain production base for SAIC Motor’s independent commercial vehicles under the recently unveiled MAXUS Datong brand, by mainly covering 11L-12L State IV-compliant engine products with horsepower ranging from 360-450.

The company currently makes diesel, natural gas, dimethyl ether and hybrid engines capable of meeting State IV and V emission standards.

Yunnei Power: now an affiliate of Chang’an

Yunnei Power Co., Ltd. became a wholly-owned subsidiary of Chang’an Automobile Group earlier this year after China’s fourth largest automaker acquired it from Yunnan Internal Combustion Engine Works, which founded Yunnei in 1999. Yunnei has thus become an important light commercial vehicle powertrain production base for Chang’an as it expands its product portfolio from traditional mini vehicles to light commercial vehicles.

Last year, Yunnei sold nearly a quarter million diesel engines, slightly down from 2009. But Chang’an has already announced that it would invest more than ¥5 billion to eventually double Yunnei’s production capacity from the current 600,000 units to 1.2 million units. Yunnei’s target is to sell more than a million diesel engines a year by 2015 with sales revenues of ¥15 billion.

Rewritten by Lei Xing based on author’s story published in Commercial Vehicle News or Shangyong Qiche Xinwen

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