Acquisition Moves China’s Weichai into EU Market

In what is believed to be the first, or one of the first, such moves by a Chinese manufacturer, Weichai Power Co. Ltd., Weifang, Shandong province, has purchased marine engine and propulsion systems manufacturer Moteurs Baudouin S.A., Cassis, France. With the acquisition, Weichai thus acquires its first engine manufacturing operationsoutside of China.

Weichai is a major manufacturer in China. Publicly traded, the company is one of China’s largest manufacturers of diesel engines, with an estimated production of over 300 000 units in 2008 used in the on-highway, off-highway, stationary and marine markets. It also owns SHAC, a truck manufacturer, and Fast Gear, which is one of the largest transmission companies in China.

Weichai Powers first engine manufacturing operation outside of China

It is now also a part of one of China’s largest industrial conglomerates, as Weichai Holdings Group, which owns slightly less than 15% of Weichai Power, announced in May that it was merging with Shandong Construction Machinery Group Co. and Shandong Auto Industrial Group to form a multimarket industrial company. The group is expected to have sales of more than US$14.6 billion by 2012.

Weichai Power has been particularly aggressive in recent years in expanding internationally. Prior to this, Weichai’s presence outside of China came through engines and powertrains sold to Chinese equipment manufacturers who then exported the machines.

In 2008, Weichai announced a three-way joint venture with Westport Innovations Inc. and Hong Kong Peterson (CNG) Equipment Ltd. To develop alternative fuel engines for use in cars, trucks, power generation and marine applications. Weichai Power also established an office in Chicago, Illinois, U.S.A., last year.

This year, besides the purchase of Moteurs Baudouin, the company established a subsidiary operation in Singapore for the combined Weichai Moteurs Baudouin operation. The acquisition of Moteurs Baudouin significantly increased Weichai’s presence outside of China, giving it a base of operations in the EU. Weichai acquired a 55 742 m2 facility in France, which currently employs about 120 people. The Cassis plant includes manufacturing, sales and after-sales, research and development operations and a test center.

“We are somewhat bold to do this as a traditional Chinese manufacturer. But this acquisition is part of a strategic plan for Weichai,” said Jason Lin, president of Weichai Moteurs Baudouin (officially registered under “SiMB”). “Weichai’s base is marine to start with, and we know the Chinese market well, but overseas applications we did not know much about. So we believe that this will be a good base for Weichai to be extended into the international markets.”

It is a base Weichai plans to use in both directions. “We have a lot of cultural exchange right now,” Lin said. “We look at Baudouin as a long-term investment — it will be our European base — so we have a lot of people coming and going between China and France.”

Weichai Power’s first engine manufacturing operation outside of China.

Weichai’s 55 742 m2 facility in Cassis, France, that currently employs about 120 people. The plant includes manufacturing, sales and after-sales, research and development operations,
and a test center.

When discussing the acquisition, Lin said, “We were looking for a marine technology source in Europe and this is a good window for us to set up a European technical center in the Cassis area of France. This is perfect for us.”

Lin announced the Moteurs Baudouin engines will be sold into the Chinese marine and gen-set markets. In addition, the company is considering selling Weichai engines in its network.

Moteurs Baudouin operates primarily in the marine markets, manufacturing complete propulsive packages including inboard diesel engines, gearboxes, propeller shafts, propellers, nozzles and onboard generator sets. Applications include a range of commercial vessels, as well as large pleasure craft.

Moteurs Baudouin’s line includes both marinized diesel engines from other manufacturers, as well as its own line. The total range covers propulsion outputs from 63 to 970 kW at speeds from 1800 to 2200 r/min.

It is Moteurs Baudouin’s M26 Series of engines that particularly got Weichai Power’s attention. A range of inline 6- cylinder, and 8- and 12-cylinder Vconfiguration engines, with displacements of 15.9 to 31.8 L, the M Series has propulsion ratings from 179 to 970 kW and is also used in shipboard auxiliary generator sets.

“We have been looking to expand our range of products,” Lin said. “Weichai has engines in the 3 to 6 L range, and our bread and butter are the 10 and 12 L engines. So this 16 to 32 L, high-speed range was a good fit for Weichai. We think it will be a range important to the Chinese market, as well as internationally.

“One of the programs we have in the works is to upgrade the M26 line. We have already begun development work on this engine platform for emissions, power and efficiencies,” Lin said. “We will also marinize engines from the Weichai series into high-speed, highpower engines. These are essentially truck engines that were very conservatively rated, so we believe there is a lot ofpotential for these engines in marine use, especially in pleasure boats,” Lin said.

 

Shown here is the Moteurs Baudouin’s M26 engine line. It is a range of inline 6-cylinder, and 8- and 12- cylinder V-configuration engines, with displacements of 15.9 to 31.8 L; the M Series has propulsion ratings from 179 to 970 kW.

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