Midea Group has announced its foray into the new energy vehicle (NEV) market with plans to produce a range of components and control systems for cars, as the Chinese home appliance maker seeks to diversify its business and explore new opportunities.
The white goods maker will start developing five main NEV parts at a Hefei factory under its subsidiary Welling, including motor drives, electric water pumps, electric oil pumps, electric compressors and electric power steering motors, the company announced at a press launch on Tuesday.
Its Hefei plant has also begun mass production of actuators, thermal management systems and driver-assistance systems, the Foshan-based firm said, adding that it has invested $100 million in NEV parts research and development via Welling since 2015. Welling currently has R&D hubs in Shanghai, Hefei, Shunde, Osaka and South Yorkshire, England.
This is not Midea’s first venture into the auto industry, according to China Times. Between 2004 and 2006, the company acquired three manufacturers, including Yunnan Coach Factory, Yunan Shenzhou Vehicle and Hunan Sanxiang Coach Group, in addition to launching a venture in the bus and coach manufacturing business. However, in November 2008, under the impact of the global financial crisis, Midea faced a production crisis and was forced to put its automotive business on indefinite hold.
Shenzhen-listed Midea, whose main product categories include central air conditioning systems, heating and ventilation systems, kitchen appliances, refrigerators and washing machines, possesses a market value of 540 billion yuan (US$83 billion).
The company reported total revenue of 284 billion yuan ($44 billion) for the full year of 2020, a year-on-year increase of 2.2%. It categorizes its range of products into three types: consumer appliances, heating ventilating and air conditioning (HVAC) and robot and automation systems.
According to the South China Morning Post, Midea is in the process of expanding its overseas production and setting up new plants in North America. It aims to achieve appliances sales amounting to $40 billion in its international markets by 2025.
In March, Bloomberg reported that Haier Group Corp, another Chinese appliance giant, signed a strategic partnership with automaker SAIC Motor Corp to cooperate in areas including autonomous driving and lightweight-material development, as well as establishing a fund to invest in areas such as intelligent manufacturing.