China’s Late ‘King of Car Parts’ Built Empire From Scrap

The chairman of a leading Chinese automobile parts maker has died, more than 40 years after he founded one of the country’s more colorful auto industry players.

Lu Guanqiu, founder and chairman of Wanxiang Group Corp., died Wednesday at 72, according to an announcement published on the company’s website.

The company, China’s largest automotive parts firm by revenue, has not named a successor.

Wanxiang Group was born in 1969, when Lu led a small group of farmers with 4,000 yuan ($602) in initial capital to take over a factory that turned scrap metal into farm machinery. The company has since expanded its operations abroad and moved into the new-energy sector.

The Hangzhou-based company now brings in more than 100 billion yuan in revenue on average each year. Wanxiang Qianchao Co. Ltd., its Shenzhen-listed unit, is worth more than 32 billion yuan. As of 2:17 p.m. Thursday, Wanxiang Qianchao’s share price was down 1.19%, at 11.66 yuan a share.

In 1994, Lu’s son-in-law Pin Ni started Wanxiang America Corp., which soon gained a reputation for acquiring firms in financial distress.

In 2013, Wanxiang America bought A123 Systems, a U.S. electric-car battery maker. A123 Systems had filed for bankruptcy in 2012, and the sale sparked some controversy in the U.S., as A123 Systems had built its battery production facilities with the help of a $249 million grant from the Department of Energy in 2009. The deal was approved only after a review by the Committee on Foreign Investment in the U.S., and A123 Systems’ contracts with the U.S. military were excluded from the deal.

In 2014, Wanxiang America acquired bankrupt luxury electric vehicle manufacturer Fisker Automotive Holdings Inc. for $192 million, after a winning a bidding war against Hong Kong-based Hybrid Tech Holdings. Fisker, now renamed Karma Automotive, received approval from China’s National Development and Reform Commission in late 2016 to build an electric car factory in China capable of producing 50,000 vehicles a year.

In May, Wanxiang said it would form a joint venture with U.S. energy specialist Hartree Partners LP to open a cross-border commodities trading platform.

Lu had received a number of awards during his life, including “Era Pioneer of Always Following the Party,” and “National Model Worker,” according to the announcement on Wanxiang’s website.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)