Weichai Group: Deep-industry behind the development of international strategy

When the attention of the outside world was focused on Weichai 's capital dance in Europe, no one knew that Weichai was undergoing a quiet revolution inside. Behind the booming capital sector, Weichai people know the importance of internal operation quality to the equipment manufacturing industry, and pay more attention to improving the internal operation quality. Technology and products are the soul of the enterprise and the ultimate carrier of any capital landing. .

The Weichai people think that the capital operation is only a method adopted during the development of the company, and the ultimate goal is to upgrade the corporate brand and product brand.

Full range of product layouts in the entire field

As the industry predicts, in 2012, equipment manufacturing companies have been faltering. Under such circumstances, Weichai has brought a bright light to the market with its remarkable achievements of “turning, adjusting, creating, and reforming.” In 2012, based on a full range of product platforms, Weichai sold 540,000 sets of various types of engines, 82,000 sets of heavy-duty vehicles, and 452,000 sets of transmissions relying on a constantly improving marketing network. Continue to maintain industry leading position. Especially in the strategic product market support, Weichai has made breakthrough progress. The company's self-developed 5L and 7L engines have sold 7,452 units a year, an increase of 76.6% year-on-year, and have fully entered the field of passenger cars and medium and heavy trucks. 22,362 units of natural gas engines were sold throughout the year, a year-on-year increase of 163.5%, showing a broad market prospect.

Weichai is the initial accumulation of products that have achieved initial success.

For more than ten years, Weichai has been concentrating on expanding its product boundaries and improving product space. Through independent research and development, linkage innovation, international cooperation, mergers and acquisitions, etc., a mid-to-high-speed parallel movement is built up in the engine block, which covers a total of 2 to 289 liters of displacement and covers a full range of product platforms covering a power of 0.25 to 10,000 hp.

Through international cooperation, Weichai has a diesel engine of over 3000 horsepower represented by L27/28, L32/40; through independent research and development, it has WP10/WP12 and WP5/WP7 engines that fully meet the national IV and national 5 emission standards. Improving the mid-high power segment product line; through the strategic reorganization of Yangchai and the introduction of advanced level D-Series and RA-series engines, the upgrading of multi-cylinder small-displacement engines has been completed; through the acquisition of the French Baudouin Company, with the M26 The 16 to 33 litre rental engine represented by the company provided technical support for full access to the yacht market.

Weichai also uses the engine as the core to extend its powertrain and commercial vehicle gold industrial chain, and continuously upgrades its energy-saving and environmental-friendly engines, and has developed a high-power natural gas engine in cooperation with Westport International.

Weichai has developed and grown up in the continuous improvement of its products. Under the influence of capital mergers and acquisitions and industrial synergy, Weichai has gradually moved toward the entire field and began to cover all aspects of production and life. Weichai has formed a product matrix in medium-heavy trucks, passenger cars, and generator sets, and has played a pivotal role in various market segments. It has truly become a full-range, full-field power supplier.

The mode of profitability of industrialized enterprises is different from that of the tertiary industry. It is the combination of technology, product, and management in various fields. The profit of a Taiwanese product has been accumulated hard. As of 2011, with the removal of necessary investment and construction, the Weichai Group’s capital reserves have reached more than 10 billion yuan, and the deep capital accumulation has given Huichai enough energy. Tan Xuguang stated that “The acquisition of the German KION Group uses only current passbooks, and is entirely self-owned by the company. With our existing funds, there is no problem in acquiring another KION.”

There is an opportunity to flourish in the field of international capital. Weichai is relying on it to do a solid accumulation of each series of products.

Grasp the core technology and create the competitiveness of the enterprise

Technology is the soul of industrial enterprises. Good products rely on excellent technology. Occupying the core technology of the industry has always been the focus of Weichai.

Weichai was marked by the successful R&D of Lanqing Power and began to set up a complete set of independent innovation R&D system. The establishment of this R&D system has allowed the integration of the gold industrial chain of commercial vehicles and the subsequent development of the powertrain. This has also made Weichai's digestion and absorption of imported technology a scalable foundation.

Based on independent research and development, Weichai has continuously strengthened international cooperation and industrial synergy. Combining capital mergers and acquisitions with independent research and development, and constantly pursuing leadership in the field of technology are the necessary conditions for Weichai to join the international competition. It also put Weichai on the commanding height of the internal combustion engine technology. [next]

On March 13, 2012, Weichai Power announced that China's first high-power, high-pressure, direct-injection, compression-ignition natural gas engine was launched on the market. This technological innovation has filled the gap in the application of natural direct injection engines in China and has become a milestone in the history of natural gas engines in China.

On May 7th, 2012, the first high-voltage common rail electronic control system independently developed by Weichai was put on the market in batches, breaking the monopoly of foreign companies in this field, filling the gap in the domestic ECU’s own brand, and also marking the position of Weichai. The transfer of application technology development to core cutting-edge technologies. At the same time, Weichai exerted its synergistic advantages and independently developed a new energy “WN20” powertrain, creating a green industrial chain of “engine-motor-transmission”.

With the continuous emergence of new technologies, Weichai completed the opening of the headquarters of the global R&D center and is a nationally accredited laboratory with the largest and most advanced powertrain assembly laboratory, vibration and noise laboratory, and heavy-duty transmission. Drum laboratory, capable of simultaneous engine, power system, key parts and vehicle matching research; 72 engine research test benches, simultaneous implementation of reliability test, performance development test and engine certification test; built a comprehensive product development The process and product database provide powerful hardware and software support for engine development. It is well prepared for the rapid advancement of frontier technology research, comprehensive mastery of core key technologies, and improvement of the company's core competitiveness.

Weichai's several acquisitions also use technology as its ultimate goal. Strategic Restructuring Italy Ferretti Group, which occupies the core technology of yacht manufacturing, has increased the application fields of Weichai Power Products, and it has extended the core engine technology of Weichai from the land to the sea.

Weichai completed the reorganization of the KION Group recently. The hydraulic core technology of Linde Hydraulics will be rapidly applied to various industrial chain products in Weichai to provide a wide range of industry synergy and the possibility of improving the domestic hydraulic level.

The simultaneous advancement of these new technologies is the continuous optimization of Weichai’s product structure. At present, it has formed a coordinated and effective market product structure. In the case of a decline in the sales volume of traditional main products, Weichai’s strategic product sales have achieved outstanding results. The WP5/WP7 diesel engine has been fully equipped in passenger cars, construction machinery and other fields. Its sales volume has grown rapidly and its product advantages have gradually become prominent. At the same time, the Weichai Boduan 6M26 electronically controlled diesel engine was successfully ignited and domestically produced, and successfully exported to France. Weichai's large-scale aircraft has successfully achieved production and passed certification from China Classification Society. The market demand in the future is expected to double. The market demand for gas engine products has rapidly increased... The advantages of the full range of products of enterprises are increasingly evident.

As Tan Xuguang pointed out, the operation of a company is a combination boxing. Without internationalization of technology, there is no internationalization of the company. Weichai knows this truth in the process of internationalization. In the post-acquisition era of Weichai, whether M&A and reorganization can effectively land on technology and effectively integrate with its own technology will have a decisive impact on the success of the acquisition itself.

Management upgrade to form an international concept

Products and technologies are the hardware for enterprise development, management and concepts are software, and fast-developing Weichai is supported by products. The management system that matches them must also be upgraded with the times.

The simultaneous upgrade of product technology is the transformation of Weichai into a modern service manufacturing industry. Weichai took channel construction and services as the starting point, continuously consolidated synergies and win-win cooperation with its partners, and gradually transformed itself into a “manufacturing and manufacturing-type service” enterprise. In recent years, Weichai has established a brand-new service model, through the establishment of a call center, the implementation of service delivery system, to improve the timeliness of failure approval and service timeliness. With the concept of "full-life-cycle service," the post-market business has been fully launched and has been rapidly developed. The e-commerce "car-linked me" model has been created, and financial products have been used to create greater value for businesses and customers.

Accompanied by the acceleration of internationalization in recent years, Weichai has actively implemented WOS lean management within the company.

Tan Xuguang led Weichai and, on the basis of retaining the essence of traditional management concepts, introduced the "advanced management concepts of the world and realized lean management" as the direction of management improvement.

Weichai first used information construction as an advanced project for lean management, successfully built an ERP system, and established a standard, standardized, unified, and efficient management platform. At the same time, Weichai introduced the concept of comprehensive budget management, specifically established a cost control center, and established a comprehensive system from the aspects of establishing a budget organization guarantee system, optimizing the budget system support system, improving the comprehensive performance assessment system, and designing a budget analysis improvement system. The budget management system changes the “find” calculation into a “counterfeit flower”.

At the same time, Weichai also introduced a variety of normative and scientific management concepts and management systems such as Lean Six Sigma Management, Excellent Performance Management, Lean Production Management, and 5S Site Management, and strengthened strategic management and process reengineering management in accordance with the Group's management needs.

Yanchai managers represented by Tan Xuguang opened up the initial stage of internationalized management in the process of internationalization of the company. Weichai complied with the management culture in the process of mergers and acquisitions and sought to integrate management culture.

In the management of international companies after the strategic reorganization, Tan Xuguang emphasized global thinking. In the process of managing the three companies Linde, KION, and Ferretti, in principle, they will be managed according to the European regulations. "Authorization is in place, responsibility is in place, assessment is in place" is a standard management method, but it is very difficult to implement. Tan Xuguang made it simple—management of a company means managing a CEO. Tan Xuguang said that the CEOs of the three companies, based on the completion of basic income, will be rewarded with how much they have over-fulfilled. As long as these companies can be managed well and they are qualified for the job, we must bring compensation standards fully in line with Europe.

Weichai is developing, and management philosophy is also evolving. However, Weichai has always adhered to an open management philosophy and the unique “responsibility, communication, and tolerance” culture of Weichai to absorb the advanced management ideas of the world, and on this basis, accumulate and refine it. Group culture concept of globalization development. This will have an inestimable and far-reaching impact on Weichai's post-acquisition era.

The solid foundation laid by Weichai for many years of primitive accumulation has enabled Weichai to quietly possess the opportunity to make its appearance on the international capital stage, and to establish and improve the five business segments of powertrains, commercial vehicles, core components, construction machinery, and yachts. The development strategy of globalization has become clear: the industrial equipment manufacturing group, which is oriented toward the whole machine, possesses core technologies, and is globally competitive and sustainable, has begun to move forward into the world’s top 500.

In the downturn of the macro environment, Weichai's post-acquisition era has begun. Weichai will spend much time and what kind of integration strategy to support Tan Xuguang's acquisition strategy and drive the dream of Weichai's international development.

The same is true for the international development of Weichai. Down-to-earth and intensive cultivation are the dependencies of Weichai's sustainable development.

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