Editor's words
One is the world’s largest independent engine manufacturer with a history of 90 years, and the other is a young Chinese automotive company that has just entered the 13th year. It has consistently cooperated in the international financial crisis and invested heavily to establish the largest in Beijing. Engine production base. For the Chinese automobile industry, which is booming and eager to go abroad, this is not a big event. However, when foreign automobile giants go bankrupt and foreign direct investment in China drops for eight consecutive months, it is Amazed.
What makes this American company unique about China? In the global automotive winter, how is the pace of internationalization of Chinese companies going? Look at the report from Foton Cummins.
Last year and this year -
The normal operation of the joint venture
On June 9th, in a new factory building of 90,000 square meters in Shahe Town, Changping District, 30 kilometers away from the downtown area of ​​Beijing, people were suddenly shaken and the festive atmosphere was passed around.
This is Beijing Futian Cummins Engine Co., Ltd., a joint venture established in March last year. The day was the day when the company's annual output of 400,000 engine production bases was officially put into mass production. From March 2008 to June 2009, in a short period of 15 months, the world economy has undergone tremendous changes. The corner of this suburb of Beijing has been able to build and put into operation according to existing steps, and the number of guests participating in the production ceremony is somewhat accident.
"I didn't feel the impact of the crisis." Beside the factory production line, company employee Gu Xuequn's face was filled with excitement. She told reporters that she joined the company in January 2008 and her salary has not decreased so far. With the official launch of the company's products, this time is even more busy, which makes her look forward to the personal future development prospects.
Wang Ning, general manager of Foton Cummins, told reporters that the financial crisis will have a certain impact on the joint venture company's project, mainly because the development time of overseas markets will be delayed. However, neither of the company’s investment partners has reduced their support for Foton Cummins. “So far, the capital investment of more than RMB 1 billion has been fully paid for shareholders of both parties, and the actual capital expenditure has reached about 80% of the project plan.†Wang Ning told reporters, “In June this year, we are still hiring employees. At present, there are nearly 400 employees in the company. In the future, they will continue to increase the number of people according to the progress and needs of the project."
“The company has begun to receive orders one after another.†Wang Ning said, “The formal production of the project marks that one of the world’s largest joint ventures for diesel engines has begun to transform into a strong product competitiveness.â€
Crisis and Opportunity -
Foreign companies do not change their confidence in investing in China
Beijing Foton Cummins Engine Co., Ltd. is a joint venture between Beiqi Foton Motor Co., Ltd. and Cummins Inc., which was formally established in March 2008. The investment in the project is 2.7 billion yuan, and the two sides each hold 50% of the shares. This is also Cummins, the world’s largest independent engine manufacturer’s largest overseas investment project.
In 2008, due to the financial crisis, the global auto industry was in a downturn, and Cummins’ sales and services were also affected. Under such circumstances, why did Cummins still invest in this project?
“This is because China is one of Cummins' most important markets outside of North America, and it is also the fastest growing market. It has always been a top priority for Cummins's strategic planning,†explains Wang Hongjie, vice chairman of Cummins (China) Investment Co., Ltd.
According to reports, in 2008, Cummins sales of 14.34 billion US dollars. Among them, sales in China exceeded US$2.3 billion, a year-on-year increase of 33%. At the same time, Foton Motor is China's No. 1 and the world's second-largest commercial vehicle manufacturer, among which sales of light commercial vehicles have ranked first in China for 11 consecutive years. The cooperation between the two sides in the development of light diesel engines can be described as a combination of strengths and strengths and complementary advantages.
“This kind of cooperation is extremely beneficial to both parties. With the help of Cummins, Foton can successfully enter the markets of developed countries such as Europe, America, Japan and South Korea, and accelerate the internationalization of the company. Cummins has completed its strategic layout in China through Futian. The full range of local production of heavy-duty, medium-sized and light-duty diesel engines,†said one industry expert who took part in the launch ceremony.
“Although we face such a short-term economic situation, Cummins is still looking to the future. The formal production of Foton Cummins confirms Cummins’s long-term confidence and commitment to the development of the Chinese market.†Wang Hongjie said.
Going out and going in -
New model of internationalization of local companies
“As the first Sino-foreign joint venture of Foton Motor, the commissioning on June 9th became a major event in the development of Futian,†said Zhao Jingguang, deputy secretary of the Foton Motor Party Committee.
The establishment of joint ventures, as early as the 1980s, has become a development model for domestic auto companies to choose. However, today's Chinese auto market is not the same as today. Especially this year, driven by a series of national policies to revitalize the automobile industry, China has produced and sold more than 1 million vehicles for three consecutive months, becoming the world’s largest auto sales. market. In such a good situation, many foreign car companies have turned to the Chinese market, and some local auto makers have also taken the opportunity to enter the overseas market. Compared with the pace of internationalization of these local companies, Fukuda's internationalization efforts appear to be insignificant.
“Fukuda's choice comes from the strategic positioning of its own development.†Zhang Xiyong, deputy general manager of Foton Motor, told reporters. With advanced strategic vision and accurate market positioning, Foton Motor has grown into the largest commercial vehicle manufacturer in China for more than 10 years. Since 2005, Foton Motor has established an overseas business unit, and its auto exports have grown steadily.
However, including Futian, most of China's auto product exports are currently concentrated in Southeast Asia, Africa, and Latin America, where the auto industry is underdeveloped, and the market in Europe and the United States is almost a blank. However, only if they really enter the European and American markets, can Chinese auto companies truly realize internationalization.
"Technology-advanced engines are the core resources of auto companies, creating a more energy-efficient and environmentally friendly 'heart' and becoming the most pressing task for all Chinese auto companies that are interested in internationalization." Zhang Xiyong said, "Fukuda Cummins produced 2.8 Rising and 3.8 liters of light-duty diesel engines will enable Foton Motor to surpass the current most stringent environmental protection barriers in the world in terms of emissions and accelerate its advancement into markets in developed countries such as Europe, the United States, Japan and South Korea."
“The Foton Cummins cooperation project should serve as a successful example of the breakthrough of China’s auto overseas.†An expert commented at the launch ceremony. In the past, joint ventures and cooperation with the Chinese automotive industry have been the introduction of foreign mature models. The joint venture company is only different from the old model of the assembly plant. This cooperation of Foton was obtained under the premise of maintaining auto brand autonomy, which is independent of the auto industry in China. How the brand achieves its internationalization strategy has a strong demonstration role.
This powerful and open cooperation model has also been reflected in another cooperation project of Foton. In January of this year, Foton Motor and German Daimler AG signed the "Commercial Vehicle Cooperation Agreement." Both parties announced that they will use China as their operation center to jointly build China's own-brand automobile, Futian Auman Heavy Trucks, and develop the global market.
According to the business plan of Foton Motor, the annual production and sales of Foton Motor will reach 800,000 to 1 million vehicles by 2010. Of which, 20% will be sold in overseas markets and annual sales revenue will reach 60 billion to 80 billion yuan. It will truly become a world-class automobile. Manufacturer company. To achieve this goal, Foton Cummins has become a key step.
"As a result, both of us have worked hard to make the project successful." Zhao Jingguang said.
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