In the current landscape of China's automotive industry, there is no standardized cooperation model between diesel engine manufacturers and vehicle producers. Industry experts suggest that these varied models have evolved over time, shaped by the development of the auto sector in China. During the planned economy era, auto plants and engine factories operated under distinct roles, with the state managing all supporting issues. Diesel engine companies primarily served agricultural vehicles. As China transitioned to a market economy, many central enterprises were reorganized and transferred to local governments. The state no longer provided support, leading to industry consolidation. For example, Dachai and Xichai joined FAW, while Chaochai became part of Dongfeng. Despite this, some companies like Weichai, Yuchai, and Shangchai continued to develop independently. With the rise of the market economy, cooperation models between diesel engine and vehicle companies have become more diverse. Today, companies such as Yuchai, Yangchai, Yunnei, and Changchai still operate as independent suppliers for light vehicles. Chaochai is now a subsidiary of Dongfeng Motor Corporation, while Xichai is a branch of FAW Group. Dashicha has transformed into a joint venture between FAW and DEUTZ. Joint ventures like Dongfeng Cummins, Xi'an Cummins, and Chongqing Cummins reflect the global trend of collaboration. Weichai, however, stands out as a unique case, often seen as a difficult-to-replicate model that has gained control over an automaker. Ni Hongjie, chairman of the China National Internal Combustion Engine Industry Association, believes that the development of internal combustion engine companies is a dynamic process, and future cooperation models will continue to evolve. He emphasized that large-scale automakers worldwide aim to have their own engine factories, and asset reorganization in China will accelerate due to domestic and international competition. This is beneficial for both the country and enterprises, and the association supports such developments. Many independent diesel engine companies have entered auto groups to secure stable support. During the planned economy era, some enterprises were decentralized, leading to a wave of reorganization between engine and auto plants. Xichai joined FAW during this period, becoming a specialized branch. It supplies engines for FAW's Jiefang J6 heavy trucks, developed in collaboration with FAW Technology Center. Xichai initially sought a stable market by joining FAW but now also collaborates with other OEMs, including Shanghai Volkswagen Bus and Xiamen Golden Trip. Xu Wuying from Xichai noted that while relying on a major automaker is beneficial, they must also adapt to the market and explore various cooperation methods. Chaochai, now a holding subsidiary of Dongfeng, recently partnered with Anhui Jianghuai Automobile Co., Ltd. to establish a new engine company. Zhang Guijun explained that market pressure drives such moves, as companies need to meet multiple demands rather than relying on one partner. Unlike its relationship with Dongfeng, Chaochai’s partnership with Jianghuai is based on business collaboration rather than asset ties. Compared to Western practices, Chinese auto companies are less open in managing their diesel engine plants. Most Western automakers use capital management, allowing greater operational and R&D freedom. Ni Hongjie predicts that due to market competition, asset restructuring will accelerate, urging local governments to focus on market conditions rather than administrative orders. While many diesel engine companies in China have joined vehicle industries, some remain independent. Ni Hongjie highlighted that China's diesel engine industry is a distinctive feature, with many companies still operating independently. Yuchai, for example, has succeeded as an independent supplier due to long-term partnerships, strong R&D capabilities, and wide market reach. Most diesel engine companies focus on specific markets, such as light vehicles, where it is more economical to collaborate rather than build their own plants. Yangchai, for instance, specializes in light vehicles, supplying engines to Nanjing Iveco and others. Fan Jianming noted that if the timing is right, Yangchai may consider joint ventures with vehicle manufacturers. Sino-foreign joint ventures are popular for technology transfer and market expansion. Dachai, after forming a joint venture with Deutz, now targets broader markets, leveraging Deutz's global sales network. Similarly, Cummins has established joint ventures in China, such as Dongfeng Cummins and Xi'an Cummins, to enhance local production and market presence. Weichai stands out with its unique model, having acquired Shaanxi Zhongqi and forming a complete industrial chain. Tan Xuguang, CEO of Weichai Power, emphasizes strategic unification, resource sharing, and independent operations. This approach allows Weichai to maintain control while enabling subsidiaries to operate autonomously. Overall, the evolving cooperation models between diesel engine and vehicle companies reflect the dynamic nature of China's auto industry. As competition intensifies, both companies and the government must adapt to ensure sustainable growth and technological advancement.

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