The industry behind WeiChai's internationalization 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. In fact, behind the turmoil in the capital sector, Weichai people pay more attention to the improvement of the internal operation quality because the Weichai people who have experienced bouts of market storms know the importance of internal operation quality for an equipment manufacturing enterprise. And the product is the soul of the company and the ultimate carrier for any capital.

In Weichai people's view, capital operation is only a method adopted in the process of enterprise development. The ultimate goal is to upgrade corporate brands and product brands.

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, link innovation, international cooperation, mergers and acquisitions, etc., a mid-to-high-speed parallel movement has been built on the engine block, which covers a full range of product platforms with displacement ranging from 2 to 289 litres and power ranging from 25 to 10,000 hp.

Through international cooperation, Weichai possesses a diesel engine of over 3000 hp represented by L27/28 and L32/40. Through independent research and development, we have WP10/WP12 and WP5/WP7 engines that fully meet the national IV and national V 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 16-33 litres represented by the leased engines provided technical support for full access to the yacht market. Weichai even uses the engine as its core to extend its powertrain and commercial vehicle gold industrial chain, and continuously upgrades its energy-saving and environmental-friendly engines: in cooperation with Westport International, it has developed high-power natural gas engines...

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 every aspect of people's production and life. Weichai has formed a product matrix in medium-heavy trucks, passenger cars, construction machinery, boats, 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. By 2011, with the removal of necessary investment and construction, the Weichai Group's capital reserves have reached more than 10 billion yuan, and the profound accumulation of funds has given Huichai enough energy. "The acquisition of the German KION Group uses only the current passbook. It is entirely the company's own funds. With our existing funds, there is no problem in repurchasing a KION." Tan Xuguang's remarks are in the ear.

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.

As people struggled to find a solution to the crisis, Weichai climbed onto the commanding height of the internal combustion engine technology one after another: On March 13, 2012, Weichai Power announced in Beijing that China's first high-power cylinder high pressure direct injection compression Natural gas engine listed. 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 7, 2012, the nation’s first high-voltage common rail electronic control system independently developed by Weichai was put on the market in batches, which caused the monopoly of foreign companies in this field to be broken. It fills the blank of China's own brand of ECU, and also marks the transfer of Weichai from application technology development to core frontier technology. 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.

Not long ago, Weichai completed the reorganization of the KION Group, and 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 increase the domestic level of hydraulic pressure.

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. [next]

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.

When Weichai's rapid development needs to face the stage of the world economy, in the face of the world's top 500 competitors, the traditional management thinking requires a rapid transition. This is difficult for the old state-owned companies, Weichai. The Weichai managers represented by Tan Xuguang quickly adapted to this role, and in the process of internationalization of the company, opened the initial stage of internationalized management.

Weichai complied with the management culture in the process of mergers and acquisitions and sought to integrate management culture. In the management of the Ferretti Group, Weichai allowed the Italians to make their own calculations. In the management of the Kion Group that was successfully reorganized not long ago, the Weichai people have adapted well to the role of a partner.

In the management of internationalized companies after the strategic reorganization, Tan Xuguang emphasized global thinking: it was not thinking of Wei Chai, and it was not Chinese 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 simplified it - managing a company means managing a CEO. "We must constantly raise our own management realm." Tan Xuguang said: The CEOs of the three companies will be rewarded with the amount of over-fulfillment based on the completion of basic income. 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.

Everyone said that Tan Xuguang was bold, but as Tan Xuguang put it, one more step is to take a step back. The same is true for the international development of Weichai. Down-to-earth and intensive cultivation are the dependencies of Weichai's sustainable development.