New-energy firm to invest $100 million in US development
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E-mail Xinhua, February 22, 2012
After a year largely spent in the United States developing products that use new sources of energy, Wanxiang America, the US subsidiary of the Chinese conglomerate Wanxiang Group Corp, said it is looking toward making a large investment.
During Vice-President Xi Jinping's visit to the US last week, the company signed a $100 million-investment agreement with Smith Electric Vehicles Corp, a producer of all-electric commercial vehicles. The bulk of that - $75 million - is to go into a joint venture between Smith and Wanxiang to develop, manufacture and sell all-electric school buses and commercial vehicles in China, a large step in the company's plan to move into the new-energy business.
Wanxiang Group Corp, headquartered in Hangzhou, Zhejiang province, is the biggest supplier of auto-parts in China. Its US subsidiary owns 28 manufacturing plants in 14 states throughout the US and employs 5,686 people. This past year saw Wanxiang America add hundreds of jobs at its sales and manufacturing operations.
The company became the subject of much attention in January last year when Lu Guanqiu, the billionaire founder of Wanxiang Group, accompanied President Hu Jintao on a state visit to the White House and displayed his company's electric-vehicle dashboards to Chicago Mayor Richard Daley.
Meanwhile, Ni Pin, president of Wanxiang America, has also been making headlines. The company's yearly sales have totaled more than $2 billion, making it one of the most successful Chinese companies to go abroad.
"The auto-parts business for Wangxiang's US operation has been big," Ni said. "One in every three US cars have our products in them. But since last year, we have been putting more emphasis on the new-energy industry."
Since last year, the company has invested heavily in solar panels, electric trucks and school buses, as well as light -emitting diodes, or LEDs. It is one of the first Chinese companies to produce solar panels in the US.
Its investments in new energy started with a JV with the battery company Ener1 Inc to make lithium-ion battery cells and packs for vehicles in China. At the time of the deal, the venture was expected to produce about 40,000 electric-vehicle battery packs by 2014.
According to The Wall Street Journal, Wanxiang paid for most of the venture, including a 168,544-square-meter plant in Hangzhou.
Ni said Wanxiang's success will depend on its ability to "re-allocate resources".
"The differences between China and the US in their systems, in markets, in their economic development, give us a great opportunity to use their respective advantages and to bring down costs and provide products that cannot be made anywhere else," Ni said.
Localization, he said, has also contributed greatly to their success. Only about 10 Chinese people work for Wanxiang America, which he said operates like a US company. "Compared with obeying rules, Chinese companies are better at creating rules," Ni said. "But when it comes to doing business in the US, I think it is important to adjust to the local rules."
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