A worker checks gears in a workshop of Shaanxi Fast Auto Drive Group Co in Xi'an, Shaanxi province. The company plans to build its first overseas factories this year. [Photo / Xinhua]

Transmission maker looks to Europe, Southeast Asia as recovery projected

Shaanxi Fast Auto Drive Group Co Ltd, the world's largest heavy-duty vehicle transmission manufacturer by annual output, plans to build its first overseas factories this year.

One or two factories will be built in eastern Europe or Southeast Asia, the group's main overseas markets, said Li Dakai, its chairman.

Li said the company expects to see a 15 to 20 percent increase in sales this year as a result of international expansion and developing new products.

The group, which has more than 10 subsidiaries and joint ventures in Shaanxi province, sells its products to the United States, Australia and Eastern Europe.

Its international market saw sales grow by 3 percent in 2012, while domestic sales fell by 20 percent, Li said.

The past year was tough for the company, with business in the heavy-truck market falling considerably.

Statistics from UBS Securities show heavy-truck sales in China dropped by 28 percent in 2012 year-on-year, but some analysts said business will improve this year.

"The heavy truck industry can expect 10 percent sales growth in 2013 because of the economic recovery and greater capital investment," said Chen Shi, an analyst from UBS Securities, in the report.

Li also said that as a builder of key components for heavy trucks, the firm will see a recovery in its business for 2013 but still needs to work on developing new products to achieve a bigger market share.

According to the China Association of Automobile Manufacturers, automobile sales exceeded 19 million in China in 2012, but only 600,000 heavy trucks were sold that year.

"We need to expand into other markets, like cars and even boats," Li said.

The company will increase investment in new-product research will reach 300 million yuan ($48.24 million) in 2013, up from the 200 million yuan in 2012, Li added.

Its car transmission factory was built by the end of 2012, enabling it to produce on a large scale.

More than 40 car makers in China had already adopted the company's car transmission for 330 types of car before the base was built.

Song Jian, a professor in the department of automobile engines at Tsinghua University, said: "As the largest heavy-duty vehicle transmission manufacturer by output, the company also has a higher production rate than its competitors and lower cost advantages."

But the company is encountering some difficulties in recruitment.

"We need more researchers, especially leaders in the field, to develop new products," Li said.

Xi'an, where the company has its headquarters, is not an attractive venue for talented personnel. "We have to improve salaries and benefits to lure talent - such as apartments and research funds," Li said.

The management of young workers is also a concern for the company, which has more than 10,000 staff members, most of whom are production-line workers.

wangwen@chinadaily.com.cn