After the restructuring, Wuling New Energy would integrate the resources from the group companies of Wuling Motors and focuses on R&D, manufacturing, and sales of new energy vehicles. According to public information, Wuling New Energy has a respectable performance in the domestic market. At present, it has the second-largest market share in the market segment of new energy logistics vehicles. The plug-in hybrid new model G200, for the commercial and multi-purpose segment market, is expected to be launched in early 2023. As regards the international market, Wuling New Energy also performs well. On 2 September 2022, Wuling New Energy delivered a pure electric logistics vehicle prototype to Japanese clients and successfully entered into agreement for mass production. The pure electric logistics vehicle is expected to commence mass production by the end of April 2023 with a target sale volume of 100,000 vehicles in five years.
Not long after Wuling New Energy appears in the public eye, good news continues to come out. It can be seen that the integration of prime assets and resources has given Wuling New Energy a solid operating foundation. Relevant resources revealed that Wuling New Energy products have already developed a product pipeline with a batch of products being launched or ready to be launched to the market, a batch of products under research and development, and a batch of products under the design and planning process. In essence, a spectrum plan of products has been initially constructed, which could allow Wuling New Energy to capture the tremendous future market potential under this promising environment for the new energy vehicle industry.
It is worth mentioning that, according to the Letter of Intent relating to the capital injection project to Wuling New Energy released in December 2021, Wuling Motors has intention to become the controlling shareholder of Wuling New Energy by further capital increaser based on its development. Given that Wuling Motors and Wuling New Energy are both subsidiaries of the Guangxi Automobile Group, the development would be sensible if further capital increase can bring long-term benefits to both parties. Overall, with the ample business opportunities provided by the new energy vehicle business, the close cooperation between Wuling Motors and Wuling New Energy in promoting business bestowed upon their own strengths and capabilities will be beneficial to the business operation and development of both. It can be expected that the better Wuling New Energy develops, the more opportunities and sustainable benefits Wuling Motors can enjoy.
Indeed, since Wuling Motors announced its restructuring plan in December 2021, it has attracted great attention from the market. According to the relevant news, a smooth kick start of the operation of Wuling New Energy would bring about favourable market responses, which in turn would benefit Wuling Motors from realizing its business strategic layout with promising growth potential. Furthermore, completion of the restructuring would also allow Wuling Motors Industrial Company Limited to transfer the related R&D expenditure on new energy vehicles to Wuling New Energy, from which the R&D costs would be substantially reduced and resources and energy could be more effectively deployed in developing more competitive core component products. At the same time, Wuling Motors Industrial, being a strategic key supplier to Wuling New Energy, together with its keeping of the export business will continue to serve as a solid and steady growth driver in contributing to the business performance of Wuling Motors.
Essentially, Wuling Motors has already actively expanded the new energy parts industry, including various types of new energy electric rear axles, motors, electronic controls, hybrid power systems, and other products. Sales volume of electric motors and electronic controls has just exceeded the volume of 10,000 units. Recently, Wuling Motors Industrial has also celebrated the milestone of the production of the one-millionth car-axle component for new-energy vehicle, impressively making it the first enterprise in China in reaching the 1,000,000 units of the miniature integral electric rear axle in less than three years period. In terms of hybrid-power systems, Wuling Motors has successfully developed its hybrid power system products for new energy vehicles, achieving a reduction in fuel consumption of more than or equal to 30% as compared with the same type of traditional fuel power vehicles. The high thermal efficiency Atkinson engine was first mass-produced in April this year, and shortly after the high-efficiency and cost-effective HEV hybrid powertrain was also mass-produced in June, which signified an important step in the transformation and upgrades from traditional fuel vehicle power to new energy vehicle hybrid power. It can be seen the profound R&D and innovation capabilities and strong production and manufacturing capabilities of Wuling Motors would undoubtedly enable it to become a key and well-deserved strategic supplier to Wuling New Energy.
The participation of Wuling Motors in the restructuring of Wuling New Energy has not only accelerated the strategic layout of the new energy vehicle field, but also allows Wuling Motors to be more focus on the research and development of automotive components for the new energy vehicles, which represents virtually a full coverage of the entire industry chain of new energy vehicles.
Wuling New Energy is now integrated with the prime assets and resources of the group companies of Wuling Motors for enhancing its strengths in the field of new energy vehicles, while the re-positioned Wuling Motors in the new energy business segment is also fully charged with power. The road ahead could be a new era of growth and development. On the back of the favourable government policies with huge market opportunities for grasping, we would wait and see whether Wuling Motors can be succeeded in beating the targets when turning this corner of the race track.
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