Cogo Announces Latest Auto Customer: Great Wall Motors
SHENZHEN, China, March 22, 2011 /PRNewswire/ — Cogo Group, Inc. (Nasdaq: COGO), (“Cogo”) a leading gateway for global semiconductor companies to access the industrial and technology markets in China, today announced the addition of a new automotive customer, Great Wall Motor Company Limited (“Great Wall”), to its portfolio. This win follows Cogo’s recent automotive customer wins with BYD (November 2009), Geely (June 2010) and Chery (November 2010), and Cogo now serves four of the largest domestic Chinese auto vendors. Cogo expects to start recording revenue from the Great Wall relationship in the third quarter of 2011.
Cogo, in partnership with a leading global semiconductor supplier, is now offering customized embedded solutions within two key Great Wall models: Haval and Voleex. These solutions include applications such as the body control unit, engine control unit and the transmission control unit.
Great Wall is expected to increase its automobile shipments by approximately 50% to nearly 600,000 units in 2011. One of the largest domestic Chinese auto vendors and a leader in both SUV and pick-up truck sales in the country, Great Wall is also a leading auto exporter and currently exports automobiles to over 125 countries.
Currently, the Addressable Market for Cogo is focused almost exclusively on domestic automobile vendors. International vendors perform most of their design work outside of China and only handle auto assembly within the country. However, as local auto brands gain share over time, it is expected that international vendors will begin to shift more design work to China in order to speed time to market and reduce overall costs. Consequently, Cogo expects key international auto vendors will begin to utilize Cogo’s customizable design work in the near future in order to compete with the lower overall cost structure and faster product cycle times of the key domestic vendors
Jeffrey Kang, CEO of Cogo, said, “I am pleased to announce Great Wall as our fourth named auto customer and I expect to add more customers over the coming months. The Chinese auto market is already the largest in the world and is estimated to grow a further 10-15% in 2011. This strong industry growth is the result of a series of demographic trends and the expectations of domestic auto vendors gaining share. Additionally, I believe that our content per automobile will grow over time.”
Kang continued, “Our recent success in adding new auto customers and increasing our auto revenue is just the tip of the iceberg. I believe autos are one of Cogo’s most favorable end markets. When Cogo reaches $1 billion in total annual revenue, I would expect our auto business will be in the range of $100 million in revenue. ”
“As we have indicated in our previous press release on March 1, our first quarter business revenue is tracking better than expected, with particular strength in our Industrials segment. Additionally, the tragedy in Japan has thus far not affected any order patterns from our customers and our supply chain has not been materially disrupted.”
About Cogo Group, Inc.:
Cogo Group, Inc. (Nasdaq: COGO) is the leading gateway for global semiconductor companies to access the rapidly growing Industrial and Technology sectors in China. Through its unique business-to-business services platform, Cogo designs customized embedded solutions using technology from suppliers including Intel, Broadcom, Xilinx, SanDisk, Freescale, Atmel and others for a customer base of over 1,600 Chinese OEMs/ODMs. Cogo’s customer list includes approximately 100 blue-chip companies, including ZTE, BYD and NARI, as well as over 1,400 Small and Medium Enterprises (SMEs). The Company serves a broad list of rapidly growing end-markets in China, including 3G Smartphones, Tablets, Automotives, High-Speed Railway, Smart Meter/Smart Grid, Healthcare and High Definition Television “HDTV”. Cogo’s fastest growing end-market is Industrial business, which constituted close to 18% of total company sales at the end of 2010. Cogo has approximately 560 employees, with about 280 focused on engineering and 100 in direct sales.
About Great Wall Motor Company Limited:
Great Wall Motor Company Limited (2333:HK) engages in the design, research and development, manufacture and sales, as well as distribution of sports utility vehicles (SUVs), pick-up trucks, sedans and automobile-related parts and components. It manufactures automotive parts and components used in the production of pick-up trucks, SUVs and sedans. These mainly include self-manufactured engines, front and rear axles, air-conditioning equipment, drag ball pins, lever assembly and other parts and components for the production of automobile.
Safe Harbor Statement:
This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in auto electronics business and businesses with Great Wall Motor Company Limited, BYD Company Limited (“BYD”), Geely Automobile Holdings Ltd. (“Geely”) and Chery Automobile Co Ltd. (“Chery”), which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings,. Copies of filings made with the SEC are available through the SEC’s electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.
SOURCE Cogo Group, Inc.