Weichai Power (2338.HK) announced that it will establish a long-term alliance relationship with China FAW Group. With the transfer of Weichai Power to FAW Group, this means that the VOLVO engine project jointly invested by Sinotruk-VOLVO Trucks-FAW Group was formally abandoned.
The Weichai Power, which parted with China National Heavy Duty Truck, soon found a "new lover." Yesterday, Weichai Power (2338.HK) announced that it will establish a long-term alliance relationship with China FAW Group. With the transfer of Weichai Power to FAW Group, this means that the VOLVO engine project jointly invested by Sinotruk-VOLVO Trucks-FAW Group was formally abandoned.
According to the agreement between both parties, after the FAW Group’s "Liberation" trucks used more than 340 horsepower, all of the heavy vehicles used Weichai Power's WD and WP series engines. At the same time, the two parties are still brewing and setting up cooperation platforms, deploying their respective advantages and developing new ones. market.
On March 29, 2004, Volvo, Sinotruk and FAW signed a cooperation framework agreement for joint investment in VOLVO engine production in Beijing. According to the framework agreement, the total investment of the three parties will exceed RMB 5 billion, including jointly establishing a joint venture engine production base in Jinan. From production in 2005 to 2008, it will reach an annual production capacity of 50,000 high-power engines. Earlier this year, as the differences between VOLVO and China National Heavy Duty Truck increased, the cooperation between the two parties began to stall. At this time, it was only two years before the three parties signed the project cooperation agreement.
“We will soon use Weichai Power Engine for our 300hp or higher heavy trucks, including future new products, and will cooperate with Weichai Power.†FAW Liberation’s General Manager’s Office did this on “First Financial Dailyâ€. Indicated.
Jia Xinguang, an automotive analyst, believes that Weichai Power has been “divorced†with China East Heavy Duty Trucks at the beginning of this year and will certainly have found a “new loveâ€. For years, FAW Group and Dongfeng Corporation have been the top two heavy-duty vehicle manufacturers, with an average annual output of more than 100,000 vehicles. The Weichai Power that climbed the high branches resolutely gave up China National Heavy Duty Truck, which had been entangled for many years.
However, the pressure on Weichai from the FAW Group is still huge. Since the commercial vehicle market entered a downturn last year, it has so far remained in the doldrums. Both FAW Group and Dongfeng Commercial Vehicles saw a decline in sales. In the first half of this year, Dongfeng Commercial Vehicle Co., Ltd. fell 32.43% year-on-year, and commercial vehicles of FAW Group declined. It also exceeded 4%. Although Sinotruk's sales growth rate reached 40%, it was achieved on the basis of a very low base last year. The overall downturn in the heavy truck market is not good news for Weichai Power.
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