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    Yuchai, the rise of Cummins China Weichai battle

         33 in China, Cummins seems to once again find themselves strangers, to reflect on after the beginning of a new awareness of Cummins China and launched counterattacks, light diesel engine of an unprecedented betting it can heal in the sense of loss re-cards, whether to help It returned to a leading role »

         Based on diesel passenger cars of the global development trend, the turn of the century, Cummins in this traditional heavy-duty diesel engine company in the field of light diesel engine start of the two actions: one is the cooperation and Chrysler 4.2 L and 5.6 L Diesel , And another is Futian cooperation with an annual output of 400,000 units of 2.8 L and 3.8 L diesel engine project. The former to be 2010 before production in the United States Indiana, which will be put into operation in Beijing in 2009. But this is the only reason? Cummins »

         One day in 2006, Cummins (China) Investment Co., Ltd. (hereinafter referred to Cummins China) Hong-Jie Wang, vice chairman of Cummins negotiation team to lead the fifth to Beijing auto Fukuda, Fukuda high-level consultations and the establishment of two joint venture companies -- Beijing Futian Cummins matters. Cummins because it is already the fourth time in China for large-scale engine production joint venture negotiations, the talks proceeded smoothly, the only remaining details, but he did not wish to waste too much time above.

         As chief negotiator, with more than 20 years of large state-owned enterprise production, technology and high-level management experience, to serve up to 14 Cummins of the Hong-Jie Wang has been such negotiations on the familiar, so he is not worried that the outcome of the negotiations, More concerned about the pace of negotiations. Since the departure from the company, he once again pay attention to the Weifang Diesel sales data. Faced with the rapid rise of local rival, Hong-Jie Wang look forward with Cummins extensive product line and international experience in the heavy-duty engines outside another market for Fanpan opportunities.

         In order to speed up the negotiating pace, but also to show that this family only 10 on the rapid rise of China's commercial vehicle business leaders the respect and attention, Hong-Jie Wang not only lead the negotiations team Fukuda and several high-level wine is by invitation, several times, "Weizui "Extraordinary company is also the administrative headquarters of the U.S. plane flying team ready to meet high-level Fukuda's visit to the United States at any time may be inspected. "Attract each other, the two sides will be a combination of natural." Fukuda and Cummins for the successful cooperation, Hong-Jie Wang explained, "to enter China ascendant Cummins diesel light vehicle market, and China needs the light commercial vehicle NO.1 Cooperation, and Fukuda need engine technology upgrading, but also the need for international, both sides need a counterpart, so that almost one talks with. "

         Indeed, Beijing Futian Cummins the establishment of a joint venture between two factions involved in the case of the Quartet can be said to be happy. The Futian, Cummins technology and products will undoubtedly support for Fukuda engine technology upgrading and firmly establish the "light commercial vehicles and" laid a solid foundation on Cummins, the engine in the heavy commercial vehicle market, again In light of China was the first engine advantage, and with good cooperation with the Futian and completed a global strategic restructuring.

         However, Fukuda Cummins Cummins can become a turning point to reverse the Chinese market » Fukuda senior journalists from confirmed, Futian area in the new joint venture company's personnel structure has yet to be implemented, the joint venture plant is still tension in preparation. However, at this time Cummins of the opponents seem to have Kaizumali full speed ahead.

         "Compared with the vehicle, the diesel engine industry in China is a fully competitive market. Example, Cummins diesel engine on the market in China is a 'catfish,' and this' catfish 'dynamic, has the power, A mix in the water, the whole market are activated, the process of China 'native fish' also the rapidly growing up. Over the years this alien Cummins' catfish 'gain weight, but it is not long National Cheng Kung University shark Fish, has not eaten any local competitors, it is China's' native fish 'will develop faster, more powerful, full competition and development is the biggest beneficiaries of China's domestic enterprises and the vast majority of customers diesel engine. "Hong-Jie Wang case To the "observation car" - described the Cummins diesel engine with the local Chinese business relations.

         Obviously, Cummins is not the biggest threat to the eyes of those in China is still the foundation of the shallow foreign counterparts, the real cause of Cummins sufficient threat, in recent years is the rapid development of the local engine companies, Weichai and Yuchai is one of the most dangerous Opponent.

         Speaking Weichai and Yuchai, Cummins showed a more complex mentality: on the one hand, China has taken root in the 33-old Cummins, the two rivals in a few years ago or insignificant, but in Cummins watch the next step to grow up and over the Cummins - Yuchai, in 1999 when close to bankruptcy, in New York into a garbage Unit, is a few dollars, and light diesel engines, diesel and other products in Europe ¢ô do a series of very Integrity. Weichai, 1999, no one will want to develop to such an extent today. On the other hand, the Chinese market in particular is indeed China's domestic enterprises to the Cummins diesel engine a lesson well, now, Cummins will Yuchai and its Weichai seen as worthy of respect and learning targets.

         "Weichai and Yuchai 2007 year-end total sales reached 58 billion (including some outside the diesel engine business places), Cummins China operations for only 21 per cent of this figure. Cummins to the Chinese market a good a lesson! The effect may not ah! Can not underestimate China's domestic competitors, regardless of the start of Cummins diesel engine than China's domestic enterprises strong number, they have the momentum of development as the top in the Cummins Naomen Yigan Qiang, we have no way out. "Hong-Jie Wang˵.

         From Wall Street's investment in its overseas strategy and Cummins, Cummins in China's strategic steadily push forward to 2007 as an example, more than 40 percent of the annual increase is to enable more overseas Chinese to become Cummins fastest-growing and most The success of the market, only the speed of Yuchai Weichai and more eye-catching. But the pursuit of a stable income from the multinational companies, Cummins China's strategy is successful, but to Cummins itself is regrettable that: "This can go faster, the pace of Maide greater."

         Fukuda and the Beijing auto joint venture for the success of Cummins industry once again occupy a commanding height, but how to ensure that the future stability of the market acquired Cummins is more concern should be the direction, aware that the Cummins has already begun to seek changes. Cummins will be how to fight a new battle this »

         Cummins intend to re-Sheung Road will change its China strategy? » Hong-Jie Wang, vice chairman of the "observation car", said: "As a mature multinational companies, Cummins will not arbitrarily change the established its regional strategy, especially those who have been countless history has proved the success of the experience." On Kangming Sri Lanka, has repeatedly been proven successful experience is leading technology, localization, pluralism and market leading enterprises operating strategy.

         In China, Cummins attributed the success to 4:00: technically adhere to the introduction of sync with the international market, localization and pluralism, with the market leading enterprises of strategic cooperation. But in a better understanding of the Chinese market before competitors, Cummins also the need for greater change.

         In a few short years, Weichai not only build and strengthen its own heavy truck industry chain, but also big step to implement the international meteor, whether it is capital or technical level, international cooperation is very broad, if Weichai in 2012 reached 100 billion Yuan targets, then no suspense and will become Cummins and the same level of world-class engine leader.

         From 2004 to 2005, Yuchai and Weichai from 5 billion yuan-level jumped to 10 billion yuan Corps. While Cummins China on the site data is not very detailed, it is still estimated to be roughly, 2004, Yuchai and Weichai is the key to Cummins over time. From the history of the development of China's auto industry, this year is China's automobile production and sales increase suddenly dropped 35.08 percent from 15.49 percent of the trough, the analysis is probably the reason for China's senior implied Cummins said the price difference.

         "All multinational companies and Cummins Engine products, the ultimate bottleneck is a price difference, this is not always break through the barriers, cross-products can not be cheaper than Guohuo also." Hong-Jie Wang explained the case of Cummins frustrated, "in the country, In particular, prices of pricing power is firmly in the grasp and Weifang Diesel Engine Yuchai hands of these local enterprises hands. "

         Can imagine that in 2004 the Chinese auto industry a sudden downturn, Weifang Diesel price to win and Yuchai is natural, even the two in the hands of Cummins Qiangguo some of the market is not impossible.

    Cummins, Yuchai, Weichai recent annual sales comparison

    Name 2004 2005 2006 2007 goal

    Yuchai (billion yuan) 107 121 141 ¡Ý 180 200 (2008)

    Weifang Diesel (million) 100 170 240 ¡Ý 400 1000 (2012)

    Cummins China (100 million U.S. dollars) 11 11 12 17 30 (2010)

    Cummins worldwide (100 million U.S. dollars) 84 99 114 130 200 (2011)

         When we re-think of Xi'an Cummins and Cummins Fukuda time and contract negotiation time (in 2004 after the occurrence), and Cummins to set up R & D center in China time (2005), we can easily find, in fact as early as Cummins In 2004 began a counterattack, but the Chinese automotive market and Yuchai Weichai the driving force of inertia Cummins is not thought of, the market lost easily find difficult! At the same time, the risk of Weichai boldly forward and Yuchai is not prudent policy-making board consisting mainly of Cummins can compared. Thus, in 2004 the gap widened again.

         2005, Cummins, held for the first time in the development of the 2010 Board of Directors of the 3 billion goal, this goal in accordance with the normal rate of increase can still beat Weichai and Yuchai, but Cummins or underestimation of the opponent and the Chinese energy market. "The development momentum of China's auto industry exceeded our expectations, we could speed faster." Hong-Jie Wang laments the case. Both opportunities and risks in the Chinese market, Cummins's prudent to lose a successful counterattack excellent opportunity.

         Today, Cummins decided not to miss any opportunities. They adopted the strategy is to continue to adhere to China's strategic particularly those magic weapon for victory, while lower prices and improve the poor response rate in particular decision-making and implementation.

         "To this end, Cummins global procurement of four regional centres located in a China's Shanghai, the center in the Futian Cummins Tanwan on a project involved the development of chain, starting at the starting point on cost control. Cummins to all Products to move to China, not just the engine, including key parts, only key parts of China, the price differential can be further reduced. "Hong-Jie Wang told the" observation car "reporter.

         "Decision-making in general is not prone to changes as a mature multinational companies have a set of their decision-making system: research, assessment, to do business model, the talks, even high-speed development of the Chinese company is also the decision-making process." Hong-Jie Wang Told the "observation car" reporter. Since it can not change the mechanism for increased speed. "The important thing is to change the management of the institutions. Ago, Cummins in charge of China, India and Russia three major emerging markets group vice president, Cao Side (Steve Chapman) office in the United States, he personally took in Beijing, China, India and Russia in the radiation Third, the response rate for the upgrading of the natural! "

         Is not only the macro-strategy and planning, in some specific aspects of Cummins and micro Fangxiashenduan also learning to the outside world and in particular to Weichai Yuchai learning. Amy Cummins is the staff of the Department of the Chinese market, he go to work every morning is one thing here is that the domestic motor industry in particular, information and Yuchai Weichai the page and found that it changes and rapid follow-up. "Our Manual will continue to improve, in particular, see Weichai or those they live Yuchai, simple, easy-to-understand language, we will learn from."

         A competition has a wealth of experience and diversified products, is a native of various operational advantages of a regional first with the cooperation strategy occupy the market, creating a gold through the capital operation of the supply chain, it is clear that this took place in the world and China's first war between the far from over.

         Cummins VS Weichai: heavy truck engines battle

         2004, Cummins sales revenue in China was 1.1 billion U.S. dollars, Weichai sales of 5 billion yuan from the level of the outbreak exceeded 1 billion, more than Cummins China the same year.

         In the past year, Cummins also officially opened a counterattack of the war curtain. Dongfeng Cummins and the company signed an agreement for cooperation in the establishment of China Technology Centre, became the first establishment of a China research and development technology center of foreign investment enterprises Diesel, Cummins increased R & D localization in China, Cummins This is an important step in the war counterattack.

         2005, Cummins first global Board of Directors held in China, announced that within the next five years will add 300 million U.S. dollars investment, in 2010 for business in China will reach 3 billion U.S. dollars. In March 11, Weichai power in the successful listing on the Stock Exchange of Hong Kong, easing the financial pressure on Weichai, two days later, Weichai has complete power of the independent intellectual property rights 10 liters, 12 liters in Europe ¢ó high-power engine prototype completed trial production And put into production, Weichai products to greatly enhance competitiveness.

         May 2005, to continue to strengthen Cummins in China, India and Russia, the strength of market growth, Cummins agency reorganization, the establishment of new markets and business groups, with rich experience in the international market Cao Side (Steve Chapman) As group vice president, he was in China and India and other Asian markets work for 18 years. November 18, the 283 is equipped with Weifang Diesel Engine ZL50C loader from Guangxi Liugong Machinery Co., Ltd. exports to Angola.

         October 2005, Dongfeng Cummins for 20 years with the company's strategic cooperation and a new level, the two sides, starting cooperation in R & D 13 L heavy truck engines, while Dongfeng Cummins and the establishment of a third joint venture enterprise - Xiangfan Fulie Canadian companies exhaust system. December 16, Cummins and Shanxi auto joint venture companies - Xi'an Cummins Co., Ltd. was established, producing 11 liters of Cummins high-powered diesel engines, plans on August 8, 2007 formally put into operation. At the same time, Cummins launched Fukuda and the establishment of light diesel engine joint venture negotiations.

         April 22, 2006, Cummins and Wuxi impetus to further deepen cooperation, joint venture of the two sides of the second joint venture - Wuxi Fanniweier Engineering Limited, turbocharger production of key components. August 8, Dongfeng Cummins and the company set up by the fourth joint-venture companies - East Asia engine research and development centers officially opened, it is foreign diesel engine company in China to establish the first research and development institutions. October 19, Cummins and Beiqi Foton Motor signed a formal joint venture agreement, the two sides will be 50:50 ratio, such as the formation of the light diesel engine companies - Beijing Futian Cummins Engine Co., Ltd.. December 18, Dongfeng Cummins and the company jointly developed ISZ13 or heavy diesel engine in the U.S. headquarters of Cummins Technical Center ignition success.

         June 8, 2007, investment in China Cummins Engine fuel production system, located in the Wuhan Economic and Technological Development Zone of the Cummins factory fuel system officially founded, is expected to put into operation in early 2008. July 4, and Chongqing Cummins Europe and the United States simultaneously with the introduction of the latest high-powered electric motor control platform. August 8, Cummins and Shaanxi steam, such as formation of the Group of Xi'an Cummins Engine Company held opening ceremony, the formal commissioning of Cummins ISM11 or heavy diesel-electric engines.

         November 2007, Weichai 2007 the first 250,000 engines off the assembly line and create world-class new height.

         Into 2008, Cummins and the Weifang Diesel Engine-card battle continues¡­¡­


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