Archives for May 3, 2018

GM bets on 3D printers for cheaper and lighter car parts

DETROIT (Reuters) – General Motors Co said on Thursday it was working with design software company Autodesk Inc to manufacture new, lightweight 3D-printed parts that could help the automaker meet its goals to add alternative-fuel vehicles to its product lineup.

FILE PHOTO – A Chevrolet Bolt EV vehicle is seen on the assembly line at General Motors Orion Assembly in Lake Orion, Michigan, U.S., March 19, 2018. Photo taken March 19, 2018. REUTERS/Rebecca Cook

Last year, the company announced ambitious plans to add 20 new electric battery and fuel cell vehicles to its global lineup by 2023. Chief Executive Mary Barra has made a bold promise to investors that the Detroit automaker will make money selling electric cars by 2021.

The ability to print lightweight parts could be a gamechanger for the electric vehicle industry. With consumer concerns over the limited range of electric vehicles a major obstacle to their mass adoption, making them lighter improves fuel efficiency and could help extend that range.

GM executives this week showed off a 3D-printed stainless steel seat bracket developed with Autodesk technology – which uses cloud computing and artificial intelligence-based algorithms to rapidly explore multiple permutations of a part design.

Using conventional technology, the part would require eight components and several suppliers. With this new system, the seat bracket consists of one part – which looks like a mix between abstract art and science fiction movie – that is 40 percent lighter and 20 percent stronger.

Other manufacturers such as General Electric Co have also beefed up their use of 3D printers in manufacturing. GM rival automaker Ford Motor Co said last year it was testing lightweight 3D printing for mass production.

GM has used 3D printers for prototyping for years, but Kevin Quinn, the automaker’s director of additive design and manufacturing, said within a year or so GM expects these new 3D-printed parts to appear in high-end, motorsports applications. Within five years, GM hopes to produce thousands or tens of thousands of parts at scale as the technology improves, Quinn said.

“That is our panacea,” Quinn said. “That’s what we want to get to.”

In the long run, Quinn said the 3D printed parts would help reduce tooling costs, cut the amount of material used, the number of suppliers needed for one part and logistics costs.

The 3D-printing based manufacturing industry is working toward mass production and trying to address issues with “repeatability and robustness,” said Bob Yancey, Autodesk’s director of manufacturing.

GM getting into the game “will put tremendous pressure” to make that happen, Yancey said.

Reporting By Nick Carey, Editing by Rosalba O’Brien

China's Xiaomi files for mega Hong Kong tech IPO, lifts lid on financials

BEIJING/HONG KONG (Reuters) – Smartphone and connected device maker Xiaomi [IPO-XMGP.HK] filed for a Hong Kong initial public offering on Thursday that could raise $10 billion and become the largest listing by a Chinese technology firm in almost four years.

FILE PHOTO: The logo of Xiaomi is seen inside the company’s office in Bengaluru, India January 18, 2018. Picture taken January 18, 2018. REUTERS/Abhishek N. Chinnappa/File photo

Xiaomi’s IPO, which will be one of the first in Hong Kong under new rules to attract tech firm listings, is a major win for the bourse as competition heats up between Hong Kong, New York and the Chinese mainland.

The listing is expected to raise about $10 billion via the public offering, giving Beijing-based Xiaomi a market value of between $80 billion and $100 billion, people familiar with the plans told Reuters.

Those targets, if achieved, will make it the biggest Chinese tech IPO since Chinese internet giant Alibaba Group Holding Ltd (BABA.N) raised $21.8 billion in 2014.

Xiaomi’s prospectus gave investors the first detailed look at its financial health ahead of the much-hyped IPO, which could be launched as soon as end-June, according to the people close to the process who requested anonymity as the details were not yet public.

The numbers underscore how Xiaomi has remained resilient even as the global smartphone market has slowed, helped in part by a push overseas into markets like India.

The company said its revenue was 114.62 billion yuan ($18 billion) in 2017, up 67.5 percent against 2016. Operating profit for 2017 was 12.22 billion yuan, up from 3.79 billion yuan a year ago.

It made a net loss of 43.89 billion yuan versus a profit of 491.6 million yuan in 2016, though this was impacted by the fair value changes of convertible redeemable preference shares.

A man walks past a Xiaomi store in Shenyang, Liaoning province, China April 7, 2018. Picture taken April 7, 2018. REUTERS/Stringer

Alongside smartphones, Xiaomi makes dozens of internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers, although it derives most of its profits from internet services.

Its relatively cheap handsets pose a rising challenge to market leaders Samsung Electronics Co Ltd (005930.KS) and Apple Inc (AAPL.O).

Xiaomi doubled its shipments in 2017 to become the world’s fourth-largest smartphone maker, according to Counterpoint Research, defying a global slowdown in smartphone sales.

It is also making a big push outside China’s borders, with 28 percent of its sales derived from overseas markets last year, up from 6.1 percent in 2015.

Yet margins on its smartphones are razor-thin. Xiaomi posted a gross profit margin of just 8.8 percent for its smartphone business in 2017 compared to 60 percent for its internet services business.

According to some analyst estimates, Apple’s flagship iPhone X and iPhone 8 have gross margins of around 60 percent.

The company makes the lion’s share of its profit – 60 percent – from internet services, including gaming and advertising linked to its homegrown user interface, MIUI, which had 190 million monthly active users as of March 2018.

DUAL-CLASS SHARES

Xiaomi’s listing plans come as the company and its investors look to capitalize on a bull run for the Hong Kong market, which has seen the benchmark Hang Seng Index rise about 27 percent over the past year.

Armed with the new rules allowing the listing of companies with dual-class structures, Hong Kong is eyeing several tech listings that are expected in the coming two years from Chinese firms with a combined market cap of $500 billion.

Xiaomi said in its IPO application the company would have a weighted voting rights (WVR) structure, or dual-class shares. The WVR give greater power to founding shareholders even with minority shareholding.

The structure would allow the company to benefit from the “continuing vision and leadership” of the dual-class share beneficiaries, who would control the company for its “long-term prospects and strategy”, it said.

Dual-class shares have been a contentious topic in Hong Kong since the city’s strict adherence to a one-share-one-vote principle cost it the float of Alibaba, which instead listed in New York.

Xiaomi is also likely to be among the first Chinese tech firms seeking a secondary listing in its home market, using the planned China depositary receipts route, two people with knowledge of the matter said.

CLSA, Morgan Stanley and Goldman Sachs Group Inc are sponsoring Xiaomi’s IPO.

($1 = 6.3610 Chinese yuan renminbi)

Reporting by Cate Cadell in Beijing, Julie Zhu in Hong Kong and Rushil Dutta in Bengaluru; Writing by Sumeet Chatterjee; Editing Stephen Coates