Cummins China's new leadership team formally launches new promotion of China's strategic restructuring

On January 8, 2010, Cummins China's newest leading team, the world's largest independent engine manufacturer, officially unveiled the Hilton Hotel in Beijing, and elaborated Cummins' strategic blueprint for the future in China to more than 40 media present.

In response to the economic crisis, the solid performance of the emerging markets represented by China helped Cummins effectively resist the challenges of the economic crisis and enabled the company to maintain a healthy profitability and lay the cornerstone for future development through the development of new products and technologies. China has become Cummins’ second largest national market except the United States, and Cummins’s strategic position in the Chinese market has become increasingly prominent. In order to further promote the business development in China and strengthen Cummins's strategic decision-making capabilities in China, Steve Chapman, Cummins global executive and current Cummins Group vice president, will directly oversee the development of the business in China. He will sincerely cooperate with Liu Xiaoxing and Wang Hongjie, vice chairman of Cummins (China) Investment Co., Ltd., to jointly bring Cummins' business in China to a new height.

Cummins China's new leadership team formally launched new

Cummins' "China Connect" took over the business in China directly, and the Chinese market became the top priority for Cummins' future strategy.

Cummins China's new leader, Cummings Group Vice President Cao Side is one of the founders of Cummins' business development in China. As early as 1985, he directly participated in the cooperation negotiation between Cummins and the Second Automobile (now Dongfeng Motor). As the person in charge of the China region in the 1990s, he led the key initiatives such as technology and product introduction, joint ventures and cooperation, aftermarket construction, and the creation of regional headquarters. Cao Side returned to U.S. headquarters in 2000 and successively held positions such as Vice President of International Department and President of International Distribution Division. In 2005, Cao Side began to focus on emerging markets and coordinated Cummins’ business development in the international markets of China, India and Russia. Now, with the gradual increase in the proportion of the Chinese market in Cummins' overall business, Cao Side, as the vice president of the Cummins Group, officially takes over the direct business development in China. This will surely help speed up the pace of decision-making in China and further increase the speed with which Cummins responds to the rapid changes in the Chinese market. The strategic position of China in Cummins' global presence has risen to an unprecedented level.

“Coordination with Cao Side” is the two main forces that have been promoting the development of Cummins’ business in China over the past ten years: Incumbent Cummins (China) Investment Co., Ltd.’s Deputy Chairman and Wang Hongjie, General Manager of the Cummins East Asia Engine Division, Cummins China Vice Chairman and Executive Director of Cummins China Strategic Development and Joint Ventures Liu Xiaoxing.

In 1994, Wang Hongjie joined Cummins as the first batch of senior management personnel employed by Cummins Inc. in China. In the following 15 years, Wang Hongjie fully participated in Cummins' business development and strategic planning in China. In February 2004, Mr. Wang Hongjie became the vice chairman of Cummins (China) Investment Co., Ltd., while continuing to serve as the general manager of Cummins Engine Division in East Asia. As the helm of Cummins' largest business in China, Wang Hongjie has made outstanding contributions to the strategic planning and market development of Cummins in the fields of automobiles, construction machinery, ships, railways, mines and oil and gas fields.

Liu Xiaoxing joined Cummins in 1996 and served as a legal advisor to Cummins China. Since 2000, he has served as deputy general manager and general manager of Dongfeng Cummins. He has far-reaching influence on the development of Dongfeng Cummins and Cummins China market. Liu Xiaoxing focused on strengthening the partnership between Cummins and Dongfeng Motor. He is committed to the construction of Dongfeng Cummins product line and customer support capabilities, further enhancing the company's market position. In 2008, the production and sales volume of Dongfeng Cummins Engine reached 162,000 units, which has become one of the largest medium and heavy-duty diesel engine manufacturing bases in China. In August 2009, Liu Xiaoxing was officially promoted to vice chairman and executive director of strategic planning and joint venture cooperation of Cummins (China) Investment Co., Ltd.

Cummins set the tone for China's strategic adjustment: develop the most suitable products for the Chinese market; provide the best quality services for Chinese users; drive for the success of Chinese partners; and provide clean power solutions for China's energy-saving and emission reduction targets.

Cummings Group Vice President Cao Side

In order to further promote Cummins's sustainable development in this key market in China, Cummins continued to optimize its strategic layout and concentrate on making breakthroughs in key areas. At today’s conference, Cao Side focused on the latest direction of Cummins’ strategic adjustment in China.

1) The full range of products are introduced into China, and the investment layout is basically completed

So far, Cummins has established a joint venture with China's outstanding automotive companies to build four engine manufacturing companies. Since its establishment in the mid-1990s, Dongfeng Cummins and Chongqing Cummins have won the trust of Chinese customers with their excellent products. Over the past few years, Cummins has teamed up with China's outstanding automotive companies to jointly establish a new engine production base. Among them, Xi'an Cummins Engine Co., Ltd., which was jointly formed with Shaanxi Auto, produced the flagship engine product of the Xi'an - ISM engine; Beijing Foton Cummins Engine Co., Ltd., which jointly invested RMB 2.7 billion with Beiqi Foton, will become Asia's largest light engine production base, producing a new Cummins. Light engine products - ISF. This light diesel power is a brand-new product built by Cummins global research and development. It is put into production in China for the first time, and it supplies domestic and international market demand. Since this product was put into production in June 2009, it has become the preferred power for many OEMs. According to the plan, Foton Cummins can produce 400,000 units per year. Cummins has all settled in China from light to medium-sized, heavy-duty engine product lines.

In addition to the engine products, the key subsystems of the Cummins engine have all been locally produced in China. In addition to the Cummins turbocharged technology system and the Cummins Filtration System, which have taken root in China for more than a decade, Cummins Fuel Systems and Cummins Emissions Processing Systems have also successively established Chinese production bases in 2008. As China implements increasingly stringent emission regulations, key component suppliers such as Cummins emission treatment systems will play a vital role in helping engine products reach emission escalation.

Two months ago, Cummins Power also made further efforts, and the new modern power system production base officially opened in Wuhan. The factory has an annual production capacity of 7,300 units, 20,000 unit engines and 15,000 ATS equipment. It is currently one of the largest domestic diesel generator production bases. In addition to supplying the domestic market, all kinds of high-quality products are also exported to overseas markets. Together with the Cummins alternator production base in Wuxi, the Cummins power product chain has been completed.

At this point, Cummins has completed the construction of its production capacity in China from key components, to complete engines, to power systems and other full-line products.

In addition to building first-rate manufacturing capabilities, Cummins has also been promoting local R&D efforts in China. Cummins was the first foreign-funded diesel engine company to establish an R&D center in China. The East Asia Research and Development Center in Wuhan was established by Cummins in cooperation with Dongfeng Motor Corporation. In the three years since its establishment, the R&D center has played an important role in the development of ISM IV product and ISF new product matching and optimization. At the same time, Cummins China’s R&D efforts are fully supporting the independent innovation of China’s auto and construction machinery companies by working with Chinese OEM customers. [next]

2) Adjust market positioning to tailor the most suitable products for the Chinese market

In order to better serve a diverse customer base, Cummins will adjust its positioning in the Chinese market in an orderly manner, extending from the high end to the mainstream market. Cummins's products were concentrated in the high-end market. As the market conditions become more mature and the local production capacity is further strengthened, Cummins will gradually advance to the mainstream market, further expand the market, and at the same time more effectively support the domestic and international markets of Chinese OEM customers. strategy.

Cummins will adopt a more flexible business model in its operations to better adapt to the needs of the Chinese market and its customers. Globally consistent at the strategic level, based on local conditions at the operational level, adopting a more flexible approach to operations, taking product-oriented approaches to the market and satisfying customer needs, and stepping up its efforts to develop a market that suits the needs of the Chinese market and customers. High quality products.

Cummins (China) Investment Co., Ltd. Vice Chairman and General Manager of Cummins East Asia Engine Division Wang Hongjie

3) Strengthen the after-sale system construction and build a first-class service platform

Cummins will fully strengthen the construction of after-sales service network, increase investment, increase service outlets nationwide, and provide customers with faster, better, and more convenient services.

Cummins will further coordinate its overall service network resources in China, strengthen cooperation with the host plant after-sales network, form a joint force, and create a first-class service platform based on customer orientation.

4) Further strengthen collaboration with partners to support their success

Cummins will continue to fully support the export strategy of Chinese OEMs. With Cummins' leading environmental protection technology, it helps Chinese customers to break the environmental barriers in the international market, and to support the development of Chinese OEM products in overseas markets with a global after-sales service system.

Cummins has always been committed to growing together with the Chinese internal combustion engine industry. Cummins' key engine parts and components, such as turbochargers, filters and emission treatment systems, have long-term support with other Chinese diesel engine companies and have made positive contributions to the technological progress and product upgrading of China's internal combustion engine industry.

Cummins China Vice Chairman and Executive Director Cummins China Strategic Development and Joint Ventures Liu Xiaoxing

Cummins will also continue to fully support the technological innovation of Chinese partners. Combining Cummins' 90 years of innovative experience and technology accumulation, it will help China's partners to innovate and develop.

5) Perform environmental protection commitments and continue to develop new products and technologies that achieve energy conservation and emission reduction targets

Cummins will continue to develop new products and technologies that meet the requirements of the most stringent emission regulations, and implement the goals of energy conservation and emission reduction.

Cummins is committed to supporting the country’s industrial policy of actively developing new energy sources, cooperating with OEM partners, end users, and research institutes to promote the application and innovation of natural gas power and hybrid power technologies. As a global leader in natural gas engines, Cummins is one of the first companies to promote natural gas engines in China. This clean power product has been widely used in bus transportation and other fields. Cummins started research on hybrid power technology as early as the mid-1990s. After more than a decade of research and development, Cummins has become the largest manufacturer of hybrid diesel engines in the world. The supporting equipment covers buses, medium and heavy trucks, and light delivery. Areas such as cars, pick-up trucks and ships. Cummins is also the first diesel engine company to apply hybrid technology in China.

Promoting Circular Economy and Promoting Remanufacturing Industry Technology: Cummins has accumulated experience in the remanufacturing field for nearly 50 years. In the United States, for example, up to 35% of the old parts can be recycled as raw materials. Cummins took this experience to China to promote its use, and took the lead in the industry to establish an international-level remanufacturing process and strict quality standards. Cummins remanufacturing technology has 20 years of application experience in the field of mining engines in China. Dongfeng Cummins is one of the first batch of remanufactured industrial bases that have obtained state permits. It is forming a large-scale remanufactured circular economy industrial chain. The first phase will form an annual production capacity of 10,000 remanufactured engines. Remanufactured technology that uses old parts for refurbishment is worth promoting in both economic and environmental aspects.

Cao Side said that the main goal of Cummins' future development is to promote the success of partners, OEMs and end users, and ultimately contribute to the industry's technological progress and industrial upgrading. For this reason, Cummins will develop more power solutions for the Chinese market with better fuel economy, lower emissions, and better performance; continue to strengthen domestic service capabilities to provide end users with better service; while continuing It supports the internationalization strategy of China's outstanding automotive and construction machinery manufacturing companies and helps them expand the international market.

Cummins in China

Cummins invests US$310 million in China. As the largest foreign investor in China’s diesel industry, Cummins’ business relationship with China began in 1975. Mr Cummins’s chairman, Irvine Miller, visited Beijing for the first time. One of the earliest US entrepreneurs to seek commercial cooperation in China. When China and the United States established diplomatic relations in 1979, China’s opening to the outside world began. The first Cummins China office was established in Beijing.

Cummins was one of the earliest western diesel engine companies to produce engines in China. In 1981, Cummins started to produce engines in the Chongqing engine plant. In 1995, Cummins' first Chinese joint venture engine factory was established. So far, Cummins has a total of 26 organizations in China, including 15 wholly-owned and joint ventures, and employs more than 7,000 employees. They produce engines, generator sets, alternators, filtration systems, turbocharging systems, and exhaust systems. Post-processing and fuel systems and other products have a service network of 12 regional service centers and more than 300 authorized dealers.

Cummins has long established a strategic alliance with large Chinese companies to achieve common development. For more than two decades, Cummins has established four engine joint venture plants with leading companies in China's commercial vehicles, including Dongfeng Motor, Shaanxi Automobile Group and Beiqi Foton. Eleven of Cummins' eighteen engine series have been produced locally in China.

Cummins was the first foreign-owned diesel engine company to establish an R&D center in China. In August 2006, the engine technology R&D center set up by Cummins in cooperation with Dongfeng Corporation was officially opened in Wuhan, Hubei Province. In 2008, Cummins sold more than US$2.3 billion in China, and China has become Cummins’ largest and fastest growing overseas market.

About Cummins

Founded in 1919, Cummins Corporation is headquartered in Columbus, Indiana. Cummins is the world's largest independent engine manufacturer. Its product line includes diesel and alternative fuel engines, key engine subsystems (fuel systems, control systems, air handling, filtration systems, and exhaust gas treatment systems) and power generation systems. Cummins provides services to customers through its network of more than 500 distribution agencies and 5,200 dealerships in 190 countries and territories.

Cummins’ sales in 2008 was US$14.34 billion, an increase of 10% over 2007; the proportion of the international market outside the United States further increased, with the share rising from 54% in 2007 to 59% in 2008, with a net income of US$755 million, compared with 07. Year-on-year climbed 2%.

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