YULIN -- Guangxi Yuchai Machinery Co. has been developing diesel engines used in passenger vehicles for years. Jiang Shihong, general manager of Yuchai's passenger vehicle business division, talked to Kevin Huang last week in Yuchai's headquarters in Yulin, Guangxi province.

Has Yuchai started producing the YC4W engine?

We haven't started mass production yet due to limited market demand. We only produced a small number of the engines for testing purposes in 2007.

How do you see the market prospects for diesel passenger vehicles in China?

We are not very optimistic about the future of small displacement diesel engines in China, especially those with displacements of below 1.6 liters.

Why you are not optimistic?

There are several reasons. Firstly, since they are small, small displacement diesel engines enjoy no noticeable advantage in fuel efficiency over gasoline engines with the same displacements. Secondly, government support for diesel passenger vehicles is still lacking. Thirdly, it is hard to refuel a car running on diesel due to a diesel supply shortage in China.

Will Yuchai invest more to develop diesel engines used in passenger vehicles?

Yes, we will keep investing, but we have slowed our pace in the development recently. We will mainly focus on the taxi markets in small- and medium-sized domestic cities over the next few years. That's because diesel's fuel efficiency won't come into play until you use a lot of it. Taxi cabs in China burn large quantities of fuel each day, and small- and medium-sized cities mainly use small cars as taxis.

How many models are you developing now?

Based on the 1.2-liter engine developed by Germany's FEV Motorentechnik GmbH, we have developed a 1.4-liter, aluminum-based model mainly for taxi markets. We will put the prototype into road testings soon. We are also developing a 1.8-liter iron-based model at present, and will bring out the prototype in about August 2009.

What are the major challenges you are facing in terms of technology?

The most difficult part is with the fuel injection system. We buy fuel injection systems from Delphi for the prototype engines now. It is a highly sophisticated product. And it is likely that its supply will continue to be dominated by global companies over the next few years.

Is it difficult for Yuchai to develop a new engine?

It is not difficult to develop an engine that can meet all standards over a short period, but it is quite hard to develop one that can maintain stable performance and good quality over a very long time.

Durability is very important. But to overcome this problem, we need good suppliers. A component with poor quality will affect the performance of an entire engine.

After the 1.2- and 1.4-liter engines go into mass production, how many parts of the engines will come from global suppliers?

I think about 50 percent will come from global suppliers' subsidiaries or their joint ventures in China. Hopefully we can purchase more from domestic Chinese suppliers in the long run.

                  Author:  Kevin Huang       Source:  Automotive News  China