Tan Xuguang: Confidence in the future for firewood

Regardless of how fierce competition is, Weichai has the confidence and capital to win the future. On January 20, 2015, Tan Xuguang, Chairman of Shandong Heavy Industry Group and Chairman of Weichai Group, at the company’s supplier conference, conducted a profound analysis of the background of Weichai's time and carried out the advantages of Weichai to meet the challenge. In-depth interpretation, and said that in the transition period of strategic adjustment, Weichai has confidence and strength, looking for opportunities in the challenges and win-win cooperation in cooperation.

Weichai Group Chairman Tan Xuguang
Weichai Group Chairman Tan Xuguang

Weichai stands on a new starting point

At this time last year, at the supplier conference, Weichai released a good news that sales revenue exceeded 100 billion. In the new year, we stood at a higher starting point. With the cooperation of the majority of supply companies, Weichai’s development Achieve new breakthroughs. In 2014, Weichai's operating income reached 107.3 billion yuan, a record high. Among them, as the group's core engine segment, it achieved operating revenue of 42.7 billion yuan, an increase of 7.3% year-on-year; the company’s share in heavy-duty trucks, construction machinery, large passenger vehicles, ships, and power generation continued to lead and the industry’s leading position remained solid. At the same time, apart from the continued advantages of 10L and 12L machines, strategic products such as 5L and 7L machines, MAN large machines and gas engines, and strategic markets such as aftermarkets, passenger cars and non-loaded construction machinery have all achieved substantial growth, and their products and market structure have become more Coordination is reasonable. A full range of products and markets in all areas support a sustainable enterprise.

Tan Xuguang pointed out that as we enter the new year, our living environment is more complex, both the pressure of the macro economy to enter the new normal, the challenges brought about by the vertical integration of the development of the industry, and the pain caused by the difficult transformation and upgrading of the company itself. Under the new situation, in the face of new competitive trends, Tan Xuguang emphasized that only cooperation can achieve win-win results, and only chaining can develop. Only a unified pace can open up the fog and usher in new life. While we are alert to the threats, we must also strengthen our confidence so that we can see further and walk more solidly.

Confidence comes from the times

Where does confidence come from? Tan Xuguang pointed out that opportunities are seen in the challenges and the engine industry is still a booming industry. As a traditional growth engine, compared with developed countries, China’s infrastructure supply is still in short supply, and there is great potential for infrastructure investment; China’s urbanization rate is still low, and urban-rural dual structure adjustment will release huge demand, and it is expected that “13 At the end, the urbanization rate in China will reach 60%, and domestic demand will be driven by the creation of nearly one billion yuan. As a new development traction, the implementation of the “Belt and Road” strategy initiated by China will promote the economic and trade cooperation between China’s equipment manufacturing industry and Asia, Africa and Europe. At the same time, the transformation of China’s economy will force technology upgrades, structural adjustments, and business model innovations in equipment manufacturing companies, thereby stimulating our transformation and upgrading and improving development quality and efficiency. Undoubtedly, the business that we depend on is still in a boom zone, and our era is still a period of promising strategic opportunities.

Confidence comes from Weichai’s backward integration model

Tan Xuguang believes that looking at the development history of companies in the same industry in the world, a single engine company is bound to move toward the vertical integration of the industry. This is a trend that has an important impact on both vehicle and engine companies. Top mid- and heavy-duty card makers, represented by Daimler and Volvo, are making every effort to extend the industry chain upstream, and the range of vertically integrated resources is becoming wider and wider. Based on historical developments and ongoing cases, we can make judgments. The vertical integration of the industry has become an irreversible trend. Only by following the trend can we succeed, and the adverse trend must fail.

Under the trend of vertical integration and integration of the industry, Weichai has chosen backward integration, focusing on the major markets for engine services, integrating the high-quality resources of the industrial chain, and exploring and establishing the whole vehicle as the leader and the power system as the core. Strategic framework. As early as 10 years ago, Weichai realized that a single engine company was difficult to survive independently, it took the lead in a series of capital mergers and acquisitions in the industry, and had core resources such as gearboxes, axles, and hydraulic components, and opened up commercial applications. Cars, construction machinery, yachts and many other gold industrial chains. Under this strategic framework, the Weichai engine can support the development of the whole vehicle and the whole machine internally, and it can be matched with a diversified market externally, and it can be used to walk on two legs. The market space is even broader.

What is the core competitiveness of a company

Faced with the same situation, what determines the core competitiveness of a company? It is the degree to which a company understands its customers and its ability to use products and services to meet customer needs. Tan Xuguang stated that Weichai has a better ability to understand and meet customer needs than its competitors. Weichai has been deeply cultivating the Chinese market for nearly 70 years and has a deeper understanding of the needs of Chinese customers, the development trend of the industry, and the adjustment of technology routes. In the past 70 years, Weichai has provided products and services for nearly 5 million customers in China and has won the trust and trust of customers. After the baptism of the market, China's heavy-duty commercial vehicles and construction machinery industry has become the world's first market and the first manufacturing base. Weichai has the honor to play the protagonist of this development process. In this process, especially in the past 10 years, Weichai not only provided engines to its customers, but also took the five powertrain systems as its core, providing customers with integrated services that met the needs of customers for differentiation and continuously deepened to China. The understanding of the market continues to enhance the company's core competitiveness.

Facing the future market demand, Weichai will create products with the three core competencies of cost, technology and quality, and provide customers with differentiated products and differentiated services to create differentiated values.

Tan Xuguang: Build core competitiveness, and match firewood with suppliers

Different from the enterprises that implemented the forward integration model, Weichai did not choose to use capital to integrate supplier resources. Instead, it used products as a link to build a platform for cooperation and cooperation with suppliers. Tan Xuguang stated that this platform is a broad platform. This mechanism is an open mechanism, which will inevitably require more partners to participate in and facilitate the sharing of values. What we are pursuing is mutual benefit and win-win with the supplier companies. We hope that the success of Weichai will be the success of the entire supply chain.

To create the most competitive products, suppliers need to join hands with Weichai. Tan Xuguang stated that no matter what kind of competitiveness it creates, it is inseparable from the competitiveness of suppliers, and everyone needs the cooperation and support. Tan Xuguang hopes that all supplier companies can establish a long-term vision, take the initiative to match Weichai's product strategy, and allocate resources according to Weichai's standards, not only supporting traditional superior products, but also supporting strategic emerging products. Focusing on the future development, the supplier companies should combine their own reality to create cost competitiveness, core technological competitiveness and quality competitiveness. As a community of interests, Weichai will further strengthen the supply and management of suppliers and ensure that our supplier team is the best in the industry.

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