Auto parts manufacturer Cayman Engley Industrial Co Ltd (開曼英利) on Tuesday said it has secured orders worth 1.5 billion yuan (US$232.77 million) from Volvo Cars Corp, thanks to growing demand for electric cars in China.
The company said in a statement that it would begin shipping battery boxes, cross beams and related aluminum components used in Volvo’s electric vehicles for Chinese customers next year.
Volvo, owned by Chinese carmaker Zhejiang Geely Holding Group Co (浙江吉利), said in a statement that every model it launches from next year will have an electric motor.
New orders from the car brand could help improve Engley’s profitability, as the gross margin of the components designed for Volvo is expected to reach more than 25 percent, a report by the Chinese-language Commercial Times said.
Engley, which is known for its aluminum products, is based in Changchun, Jinlin Province, and its major customers include FAW-Volkswagen Automotive Co Ltd (一汽大眾), Beijing Benz Automotive Co (北京奔馳) and Shanghai Volkswagen Co Ltd (上汽大眾).
Engley’s revenue last month rose 26.71 percent annually to NT$2.13 billion (US$72.4 million), a record high, and ended last year 20.53 percent higher compared with a year earlier at NT$18.78 billion, because of solid demand from the Chinese market, the company reported earlier this month.
In China, the sales of passenger cars increased 1.4 percent year-on-year to 24.72 million last year, while electric and hybrid vehicle sales rose 53.3 percent to 777,000 units, the China Association of Automobile Manufacturers reported on Jan. 11.
Engley has not yet released its earnings result for last quarter. Its aggregate profit for the first three quarters of last year plunged 53.16 percent annually from NT$1.4 billion to NT$657.16 million, dragged down by rising steel and metal costs, and its gross margin also narrowed from 22.68 percent to 19.62 percent over the period, company data showed.
Other Taiwanese auto parts suppliers that reported double-digit annual growth in sales last year included Kung Long Batteries Industrial Co (廣隆, 10.62 percent), Turvo International Co Ltd (宇隆, 11.79 percent), Chian Hsing Forging industrial Co (江興鍛壓, 22.57 percent), Global PMX Co Ltd (智伸科, 14.79 percent), Macauto Industrial Co (皇田, 20.74 percent) and BizLink Holding Inc (貿聯, 68.54 percent), according to Taiwan Stock Exchange statistics.
This year, the strength of the New Taiwan dollar against the US dollar is likely to continue to weigh on the business performance of Taiwanese auto parts manufacturers, analysts said.
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