Australian based natural gas vehicle systems developer, Advanced Engine Components (AEC), has announced orders for Indonesia and China with further orders from clients in both countries on the cards. AEC’s product range centres on their core NGVS Engine Control Unit and says the sales put the company on target for a 50% revenue increase in the 2008 financial year.
The Chinese order is with Weichai for more than 300 NGVS units and a total value in excess of $US1.1 million.
The current order will bring to 671 the total number of AEC NGVS kits delivered to Weichai since 1 July 2007. The current order exceeds the total number of NGVS kits purchased by Weichai for the whole FY2008. This growth reflects the increasing demand for natural gas (NG) engines throughout the Chinese market.
The Weichai group, one of China’s five largest heavy duty engine manufacturers, produces and
sells over 300,000 engines, mainly diesel, each year.
As well as Weichai, AEC has production arrangements with two of China’s other four major heavy duty engine manufacturers. AEC has additional arrangements with two smaller Chinese NG engine builders that acquire the base engine and all components, including the NGVS from AEC, from third parties.
China’s use of NG is expected to increase by over 300% in the next 15 years. This growth is being driven by price and stability considerations of NG compared to diesel and environmental considerations.
The Chinese Government recently stated in the draft “China Medium and Long Term Energy Conservation Plan” that one of the 10 most important energy conservation projects is “to promote NG use for buses and taxis”. The use of NG will leverage China’s existing reserves, reduce reliance on imported oil and improve air quality in cities.
To further encourage the use of NG, the Chinese Government has proposed a Fuel Tax Regulation by which NG vehicles are expected to be taxed on a “half-tax” bracket compared to vehicles powered by gasoline or diesel.
The Indonesian order is to build and deliver
compressed natural gas (CNG) engines, with a sales value of $US425,000,
to PT Arimbi Jaya(AJA). The current order, to be
delivered by 30 June 2008, brings to 65 the total number of CNG engines
purchased from AEC by AJA since 1 January 2008. AJA are comparing
different CNG engines, incorporating the AEC NGVS, with the intention
of placing a further $2.2m order with AEC in the near future. AJA is a
large Indonesian based truck and bus reseller and operator. They are
building their own CNG refuelling facilities.
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