Innovating Not Only Weichai Creates New Leading Parts Industry

In midsummer, the reporter went to the Weichai Group in Weifang, Shandong Province. In the No. 1 plant that produced the LanQing engine, the workers in the workshop, which had a world-class production line, were busy and orderly. One Taiwanese engine went off the production line. Quickly loaded into containers and shipped to all parts of the world. At the factory gate, trucks waiting for the engine to be shipped have long queued up.

“In 2010, the Weichai Group achieved operating revenue of 91.1 billion yuan, an increase of 74% year-on-year; profits and taxes of 12.5 billion yuan, an increase of 85%; and profits of 9.44 billion yuan, an increase of 88%.” Talking about the year's results, the total Sun Chengping, the manager, was full of joy.

Weichai production workshop

A diesel engine plant has grown into one of the strongest auto parts companies in China. Weichai Group has provided us with a brand new interpretation sample.

Constantly increase innovation power

In the center of the Weichai Power Exhibition Hall, a sapphire blue engine is very attractive. Tan Xuguang, chairman of Weichai Group, said that this is the first high-power high-speed engine in China that has been developed by Weichai based on high-end demands in the market. Weichai people named the machine “Blue Engine”. With the advent of Blue-Ring, there is no competitive advantage in high-priced foreign similar products in the Chinese market.

“If there is no Blue-Qing's coming out, there will be no brilliance for Weichai today.” Wu Zhaohui, the front-mounted squad leader of the second class, told reporters that when the state invested 140 million yuan, Weichai imported the Steyr engine production line from abroad. Despite possessing this technology-leading product, the drawbacks of the enterprise's mechanism, system, etc., combined with market issues made Weichai once trapped in the dilemma of bankruptcy.

In June 1998, when Xuichai was the most difficult time, the 37-year-old Tan Xuguang was appointed director. The first thing he chose after taking office was to inject the genes of the market into Weichai, create customers, and open up markets.

Under the leadership of Tan Xuguang, technical personnel who had never left the house were "moved out of the chair" and walked out of the office to redesign and remodel the engine from the perspective of satisfying consumer demand. After a thorough reform of the enterprise, it will soon return to life.

However, as the market continues to deepen, Weichai people have discovered that, like key components such as automobile engines, Chinese companies are mostly concentrated in the low-end market, relying on "price wars" to compete for limited market share, and high-power engines Due to the high technical content and difficulty in research and development, it has been dominated by foreign companies for many years. Facing this reality, Tan Xuguang made a bold decision: to set up a research and development base in Europe, where the world's engine technology is at the forefront, to borrow brains and jointly develop high-end engines. Thus, a 30-person research team headed by Yu Dehui, director of the Weichai Technology Center, came to Europe and established an R&D center with an internationally renowned engine R&D company.

Joint research and development, let Weichai eat sweet fruit. Sun Shaojun, CEO of Technology, said that before 2000, it was the introduction, imitation, and learning stage; from 2000 to 2005, it was a stage of cooperation with foreign R&D institutions; after “Lan Qing,” it was a completely independent innovation stage. Through the R&D of the Lanqing engine, the Weichai people realized “Four Ones”: built a research and development platform, brought out a research team that could fight, and established a set of advanced R&D processes, forming a set of strict R & D specifications.

In Weichai Group, the reporter also discovered two phenomena that are worth noting. The first is Weichai's “Application Engineering Department.” This department, which focuses on technology matching research and development, belongs to the marketing system. Second, most of the marketing staff of Weichai sell technical talents.

Weichai president assistant Li Shaohua told reporters that Weichai’s sales staff had very few “marketing” professional students, but instead there were many “combustion engine” professional graduates, and the market’s front-line staff also required a three-year work experience in the diesel assembly test station. And experience. The Department of Application Engineering, which is a marketing system, spends no less than one-third of its annual visits to the market. Marketers are required to have the ability to speak with data, models or even drawings. They can use professional technical parameters to explain to customers. The diesel engine fuel consumption curve shows a downward trend. The market performance of specific products can be used to detect problems and provide timely feedback to the technical department.

It is through the organic combination of “market and technology” that Weichai has formed a unique barrier-free communication mechanism and upgraded the Blue-Rise generation with three major configurations. It has developed the “oil-water-cooling cold treasure 007” and “electromagnetic constant-temperature fan”. "Second-generation products such as "Turn to Juli Pumps," and others, are highly favored by the market.

According to Sun Shaojun, in recent years, Weichai's R&D investment has reached more than 3% each year, and nearly 5% at high times. Since 1999, Weichai has invested a total of nearly 10 billion yuan in technology research and development and transformation. The ratio of hardware and software has basically reached 1:1. The company has hosted and participated in 10 national "863" projects and scientific and technological projects.

Technology advances and innovation is endless. At present, Weichai has established research and development centers in Weifang, Hangzhou, Xi'an, Shanghai, Chongqing, and Yangzhou, and has two overseas R&D centers in France and the United States. Every week, Sun Shaojun must hold an online video conference with various R&D centers around the world to exchange information and develop collaboratively. Sun Shaojun said that after three to five years, Weichai will become one of the most powerful R&D centers in the industry in the world.

Create "golden industrial value chain"

In China, the development and growth of auto parts companies is often constrained by vehicle manufacturers. Weichai chose to master the entire industrial chain from research and development of key components to complete vehicle manufacturing, and create a “golden industrial value chain” for the commercial vehicle industry.

In March 2004, Weichai Power successfully landed at the Hong Kong Stock Exchange and became the first internal combustion engine company listed in Hong Kong. Tan Xuguang knows that the core power of Weichai's growth, the industrial chain, is still relatively weak. Weichai promptly seized the opportunity to acquire the torch.

What Tan Xuguang sees is not the financial value of the Hunan Torch but the strategic value. Whoever controls the Torch of Hunan Province means that it controls the vehicles and spare parts resources of heavy trucks with the highest profitability in China. Obviously, the "Hunan Torch is the golden key for restructuring the heavy truck industry." In the end, on August 8, 2005, Tan Xuguang won a 28.12% stake in the Hunan Torch to 1,023.8 million yuan, becoming the largest shareholder of the Hunan Torch.

Through the acquisition of the Hunan Torch, Weichai has basically formed a “golden industrial chain” in which the three major businesses of powertrain, vehicle and parts are complementary and operate independently. With the successful acquisition of the merger torch, the company has owned a cluster of subsidiaries consisting of more than 40 high-quality companies such as Shaanxi Heavy Duty Truck, Shaanxi Fast, Zhuzhou Spark Plug, Zhuzhou Gear, and Mudanjiang Fortis Air Conditioning. The new pattern of coordinated development of the three major industrial sectors of the assembly, commercial vehicle and auto parts.

The industry chain has grown. Where are the core competencies of the Weichai Group? On July 24, 2007, Xiyuan Hotel in Beijing, at the economic operation analysis conference held by Weichai Group, in order to better exert the synergy effect and the overall industry The advantages of the chain and the realization of complementary resources, Tan Xuguang put forward the concept of "chain competition". At the end of 2007, as the result of industrial synergy and “chain innovation”, the first “powertrain” for the first product to match and integrate engines, transmissions and axles was born in Weichai.

This move has greatly improved the overall capabilities and quality of an industry. Previously, in China's commercial vehicle market, manufacturers of engines, transmissions, and axles were all relatively independent. After the OEM purchased related products, it was necessary to re-align the system and continuously adjust various parameters, which was time-consuming and laborious. Now, as long as the vehicle manufacturer designs and installs cabs and cars on the basis of this “powertrain”, a new car can be brought to market, and the R&D cycle is shortened by 1/3. Since then, in the field of commercial vehicles, Weichai Group has had an undisputed competitive advantage in terms of engines, gearboxes and vehicle brands.

According to reports, the heavy-duty vehicles that currently run on China's highways, with more than 15 tons of heavy vehicles, have 60 Weichai high-power engines for every 100 vehicles. At most, this latter figure is 80. This set of data may allow us to better understand the value expansion that Weichai achieved through "synergy."

In the direction of internationalization

Tan Xuguang knows well that Weichai wants to truly be the first in the industry, and internationalization is a “hurdle” that must be overcome.

Judging from the international development model of world enterprises, mergers and reorganizations are short cuts. In 2008, due to the impact of the international financial crisis, the French Boduuan engine company, which has a history of more than 100 years, was on the verge of bankruptcy. In December 2009, Weichai promptly acquired Baudouin Inc. and established a European R&D center as a platform. Through the European R&D center platform, Weichai Europe’s WP6 and WP12 engines quickly opened the door to Europe and entered the European market for the first time. In March 2010, the Weichai-Boduuan (Singapore) company incorporated and established by Weichai Group was formally established in Singapore. This is the first branch of Weichai Group in Southeast Asia, marking the establishment of a global brand by Weichai. The internationalization goal has taken another important step.

Mr. T.Taghizadeh, president of Amico Industrial Group in Tehran, Iran, gave a medal to Zhong Lei, deputy director of the Weichai Iranian Service Center.

This medal is a microcosm of the successful operation of the Weichai Global Service Network. Zhong Lei told the reporter that Amicco is a direct supporting plant for Weichai in Iran. At present, there are about 4,000 diesel engines of Weichai series such as WD615 and WD618 in the company, and the company's services are well done for Weichai engines. The promotion of sales and brand image in Iran is crucial.

At 6 o'clock in the evening of mid-July of mid-July 2010, Zhong Lei received a phone call. The technical staff of the Amico company's factory reported that several cars started to vibrate after they started. They suspected that it was caused by the engine. Although Amico’s headquarters is in Tehran, its factory is located in the town of JOLFA, a tax-free area on the border between Iran and Azerbaijan. The distance between the two cities is more than 800 kilometers, and it drives for about ten hours. Zhong Lei took the opportunity to decisively and rushed to the scene with Zhang Jiafu and Song Weihua. All the way to a bumpy ride, they finally arrived at this border town at 5 am.

After repeated inspections, he and his colleagues discovered that there is no problem with the engine itself. The vibration is caused by the improper configuration of the vehicle and the inappropriate support of the water tank. They explained the cause of the problem to the factory's technicians and testers, and cooperated with them to make changes to the bracket. During the inspection, it was also found that the sound of a car's engine was abnormal. Through the inspection, it was found that there was a user-added spring washer in the cylinder head.

After the matter was successfully handled, they specifically wrote a written report and presented it to the chairman of Amicur. The urgency of this eager user, placing himself in the spirit of consideration for the user and facing the problem, rigorous work attitudes that do not shirk responsibility have been highly praised by the chairman of Amico. With timely service, good attitude and effective communication, the Weichai Group's Iran Center has finally won the recognition and trust of Iranian users with its own efforts. On September 21, 2009, when Zhong Lei, who was preparing to return to China, went to the headquarters of Amicurco Industrial Group to leave the company, the deputy general of the group solemnly handed this medal to him.

At present, Weichai Group has established more than 30 sales outlets abroad, and its products are exported to more than 60 countries and regions including India, Vietnam, Russia, Southeast Asia, the Middle East, and South America, and are equipped with high-tech, high-performance, and high-quality products. The first-class service is well-known both at home and abroad.

“Green power, international firewood.” Tan Xuguang said that during the “12th Five-Year Plan” period, the pace of internationalization of Weichai Group will be further accelerated.

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