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Komatsu says it plans to restructure its business in China this year, cutting its annual production capacity of construction machinery equipment in China by nearly 40% to 10,000 units.
At the same time, due to sluggish market demand, it will merge its equipment production subsidiary and its parts subsidiary in Jining City, Shandong Province. The production subsidiary and casting subsidiary based in Changzhou City, Jiangsu Province, also will be merged.
Komatsu’s production subsidiaries in the two provinces previously terminated their joint venture relationship. Even if the annual production capacity is reduced to 10,000 units, it is expected that local production capacity will enable Komatsu to increase exports to Southeast Asia and other regions.
South Korean automotive battery giants are moving into the U.S. market, with SK Innovation teaming up with Ford and LG Chemical with GM to promote the construction of an automotive battery plant. SK plans to invest about 300 billion yen in the plant to produce 22 gigawatt-hours of automotive batteries, enough to power 220,000 EVs a year, and in a joint venture with Ford, the two companies will invest 600 billion yen to build a giant 60-gigawatt plant.
SK’s annual production capacity as of 2019 is only 5 gigabytes at its Korean plant. The capacity is expected to increase to 30 gigawatts in 2020 with the launch of plants in China and Hungary, to 85 gigawatts in 2023 with the addition of the US plant, and to exceed 185 gigawatts in 2025 with the addition of the joint venture with Ford. SK, a late entrant to the market, ranks sixth with a 5% share of the global market in 2020.
The development trend for the new energy vehicle (EVs) market remained positive through 2022. In November, retail sales of new energy passenger vehicles reached 598,000 units, with a year-on-year growth of 58.2%. From January to November, the domestic retail sales of new energy passenger vehicles were 5.03 million units, with a year-on-year growth of 100.1%.
As for December, the Passenger Transport Federation believes that the subsidy for new energy vehicles will decline by 12,600 RMB this year, which is much more than the decline of 5000 RMB in the previous two years. In addition, some vehicle enterprises have announced a price increase for next year, which may promote strong pre-buying of new energy vehicles at the end of the year and boost sales.
This year, the new energy vehicle market is expected to achieve the annual sales of 6.5 million vehicles.
The global energy structure has accelerated the adjustment to green energy, and the investment in traditional energy is insufficient. Under the influence of COVID-19, energy supply and demand are disrupted, exacerbating the contradiction between supply and demand, resulting in global power shortage.
China recovered from the epidemic earlier than many other countries and is now almost the only major manufacturer, so industrial power consumption has increased significantly. Power rationing is mainly to alleviate the power shortage and achieve the goal of energy conservation and emission reduction. China is dominated by thermal power generation, and there is a serious shortage of clean energy. There are still big problems in the energy structure.
PSRAnalysis: In 2021, China’s electricity demand will grow by more than 10%, which greatly exceeds the previously estimated demand growth of 6% to 7%. At present, the substantial growth of power demand has put great pressure on power supplies. Coal accounts for about 70% of China’s electricity consumption, but the output of coal is far lower than the demand for electricity.
“China has the largest automobile production in the world, the most complete industrial foundation, supply chain foundation, talent foundation and market foundation,” said Li Bin, chairman of Weilai automobile.
These factors provide China with a significant advantage in developing intelligent EVs, he said “In fact, if we can have the advantages of these four aspects at the same time, China is the only one in the world,” he added.
The penetration rate of new energy has exceeded 10% in 2021. From the trend, this target will exceed 20% in 2025. China’s penetration rate of intelligent electric vehicles in 2030 will exceed 90% in new car sales. In recent years, with the accelerated popularization of intelligent electric vehicles, the automotive industry will once again become the commanding height of scientific and technological innovation.
PSR Analysis: Today, new bus procurement is fully electrified. Buses have fixed routes, and the operation range is relatively stable. At the end of 2020, all buses in key regions and major cities have been replaced with new energy. The trend of bus electrification will continue to be promoted nationwide and gradually electric buses will replace diesel vehicles.
Considering that the running distance and working environment are relatively controllable, the market promotion of oil and electricity price difference, and the gradual completion of bus electrification, taxis will also accelerate electrification.
The second step is to accelerate the electrification of trucks such as urban logistics, environmental sanitation and muck trucks. The State Council proposes to promote green and low-carbon means of transportation, port and airport services, urban logistics distribution and postal express to give priority to the use of new energy or clean energy and strengthen the charging and switching facilities of new energy vehicles.
The penetration rate of private car electrification will also continue to increase. According to the current situation, electric vehicles can replace unified fuel vehicles in terms of price and mileage around 2025. At the same time, with the promotion of electrification in the field of public transport and trucks, driving the continuous improvement of infrastructure, the electrification of private cars will proceed more smoothly. PSR
Jack Hao is Senior Research Manager – China, for Power Systems Research
The economic relationship between China and the ROK has reached a turning point. According to statistics from the ROK, for the first time in 28 years, the ROK has a trade deficit with China. China has been the best customer of the export driven ROK economy, and this is causing concern in the ROK. At the same time, Chinese companies are intensifying their takeover of Korean companies, and in response to the escalation of the U.S.-China conflict, they have begun to pursue a strategy of using Korea as a foothold to capture the U.S. market.
A management official at South Korea’s Hyundai Motor’s joint venture plant in Chongqing, China, said that the passenger car assembly plant is idle and that negotiations are underway to sell it to a Chinese company. Hyundai Motor started operations in Chongqing in 2017, including an assembly plant with an annual production capacity of 300,000 units, but sales slumped due to the rise of Chinese automakers. At one point, the company occupied second place with a market share of nearly 10%, but recently it has fallen below 2% and slumped to 10th place.
The new national standard for automotive emissions, scheduled to be implemented July 1, 2023, could boost China’s auto industry, say industry insiders.
The Ministry of Ecology and Environment, the Ministry of Industry and Information Technology, and other departments recently issued a joint notice proposing that the National VI Emission Standards for automobiles (National VI B) be implemented nationwide July 1, 2023.
Industry insiders believe that the implementation of the new regulations will drive car companies to accelerate technological upgrading, thereby achieving green and low-carbon development of the automotive industry.
Sales of Malaysia’s national carmaker Proton are booming, with its market share in the country reaching 27.3 % in February, hot on the heels of another national carmaker, Produa’s 38.8 %. This is not a single month irregularity; for the full year 2020, the rate is 20.5%. For the full year 2020, the share is 20.5%, almost doubling in just two years from a record low of 10.8% in 2018. This is the first time in seven years that the market share has recovered to the 20% level.
The turning point of the turnaround offensive was a capital/business alliance with a Chinese manufacturer: in September 2017, the company accepted a 49.9% stake from Geely Automobile’s parent company and began importing the right-hand drive version of the X70 SUV, which it produces and sells in China, at the end of 2018. As soon as this became a hit, the company switched to domestic assembly in Malaysia at the end of 2019, and introduced an additional small SUV, the X50, in September 2020.
A newly discovered ore containing vast quantities of an element widely used in semiconductors has been found in China. The discovery could propel new advances in battery technology.
Geologists have found the rare earth metal niobium inside the new ore named niobobaotite from north China’s Inner Mongolia. The rare earth metal is widely used in alloys for jet engines and rockets and has also been shown to have exceptional current conducting properties in low temperatures.
Researchers have said batteries made from niobium have several advantages over traditional lithium-ion batteries. The Brazilian Metallurgy and Mining Company (CBMM) has been working on new projects towards the use of niobium to make advanced lithium-ion batteries.
Mercedes-Benz heavy-duty truck factory in China has started mass production and its first domestic Chinese heavy-duty truck has rolled off the assembly line. The rollout reflects the Mercedes Benz truck localization project, under which Mercedes is producing heavy duty trucks built specifically for the domestic Chinese market.
The first batch of Mercedes Benz domestic heavy trucks is scheduled to be delivered to customers in early November.
In the process of localization, MB is striving to achieve a balance between high quality and cost. It is working with 150 domestic suppliers to improve manufacturing quality capability and localize the supply of more than 1500 parts. Presently, the localization rate of Mercedes Benz heavy truck Actros series exceeds 50%, and the localization rate of Actros C series is 90%.
Mercedes Benz trucks has established a Mercedes Benz business unit under the joint venture of Daimler Trucks Co., Ltd. and Foton Motor, which have a 50: 50 share ownership.
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