On April 24, at the launching ceremony of Weichai Light Smart Power Base, Weichai Power Executive CEO Zhang Quan focused on Weichai's light smart power strategy, emission upgrade, vertical integration of main engine factory, and future development direction of Weichai. I have my own opinion.
"Light smart power will be an important member of the Weichai Power Family"
Question: At the beginning of this year, Weichai launched the WP13 engine, which extended to the high horsepower. Now, with the release of light power, what is the strategic consideration? What is the position of light power in Weichai Power's entire product chain?
Zhang Quan: As an important part of the Group's overall business map, the enterprises in Yangzhou are important carriers for us to build a full range of general-purpose power providers and transform into the whole vehicle business, while light-duty power is an important member of the Weichai Power Family. Yangchai will be the Weichai 2L-4L light-duty power production base, and the second phase will be planned to produce 100,000 units per year.
Weichai plans to achieve sales revenue of 10 billion yuan in the Yangzhou area by the end of 2018, and build a 10 billion-level R&D and manufacturing base for complete vehicles, complete machines and light engines.
Question: What is the current sales situation of Weichai Light Power? What is the market recognition?
Zhang Quan: At present, Weichai's light power market is in short supply. Its main performance indicators such as power, economy and emissions are better than competitors. It has been recognized by mainstream customers such as Jianghuai and Yutong, and its performance has led the domestic multi-cylinder small. Upgrade of the displacement engine.
“Emissions upgrades are a challenge and an opportunity for Weichai.â€
China Business News: At the launching ceremony of this light smart power base, what do we mean by "wisdom" in our engine?
Zhang Quan: "Smart Power" mainly reflects two aspects, one is the technical level of our engine, and the other is the production process of our engine. In the light smart power plant we set up, we will use the "Internet +" model for R&D, production, management and marketing.
Question: Is the emission upgrade a pressure for Weichai?
Zhang Quan: Emissions upgrade is both a challenge and an opportunity for Weichai.
We can see that the competition in the low-end light truck market is mainly based on price wars. It can be said that the market is “Red Seaâ€. The market for high-end light trucks is the "blue ocean." This time, our light and smart power base is used to develop and produce VM series engines with global leading technology to meet national V and national VI emission requirements.
In the field of heavy trucks, with the upgrade of emission regulations, the entry barrier for the engine industry will be further enhanced. The annual R&D expenditure of Weichai accounts for 4%-5% of sales revenue, which is not what ordinary companies can do.
With the upgrade of emissions and technology, the price of the engine is also rising, and the absolute value of the profit is rising.
"Non-road power, the future will be the main force"
Question: Since 2015, the Chinese government has actively promoted the construction of the “Belt and Roadâ€. Under this large strategic pattern, how will Weichai Power exert its own advantages and quickly integrate into the construction of the Belt and Road? What are the development opportunities and what challenges will they face?
Zhang Quan: "One Belt, One Road" has a great impact on Weichai. In recent years, Weichai is being deployed in the Middle East, Africa, and South Asian countries. Countries such as Iran are 2000-3000 units a year. Weichai engines, which have the highest national share in the domestic heavy trucks, bulldozers, loaders, ship engines, generator sets, etc., currently account for 10%-15% of total sales.
Under the guidance of the “One Belt, One Road†strategic thinking, Weichai also constantly adjusts its development strategy. In overseas markets, we have also opened up the market by establishing production plants and implementing technology exports in the local area, and have changed the development model of pure product trade exports. Gradually from the low end of the manufacturing industry to the high end.
Question: Weichai's strong alliance with Caterpillar (Qingzhou), what is the background of the cooperation between the two sides? Why can this cooperation be achieved? What does it mean for both parties?
Zhang Quan: Under the new economic normal, cooperation can achieve a win-win situation. Weichai and Caterpillar (Qingzhou) are leaders in their respective fields and have a long history of cooperation. The predecessor of the Caterpillar (Qingzhou), the Shangong Group, is the first construction machinery manufacturer to match the Weichai engine. The cooperation between the two parties will further enhance the competitiveness of the products and promote the development of both parties.
Question: At present, there is more vertical integration in the heavy truck industry. How will Weichai be deployed to cope with the change?
Zhang Quan: Looking at the development process of international companies in the same industry, a single engine enterprise must move toward the vertical integration of the industry. This is a trend. As early as 2005, Weichai complied with and led this trend. Since the acquisition of the Hunan Torch in 2005, it began to vertically integrate, and therefore has a gold industrial chain of heavy commercial vehicles, and its intelligent control technology for powertrains. The advantage has become one of the core competitiveness of Weichai.
Only when there is competition can we make progress. Our engine technology is constantly moving towards the forefront of the world in the fierce competition. The cake in the market has always been rushed out by competitive advantage. Weichai has always maintained confidence in this. In the field of heavy commercial vehicle power for more than 30 years, Weichai has more than 3 million market shares, which is the most important pole in China's heavy-duty truck engine supporting market. This is beyond doubt.
At the same time, based on decades of market accumulation, Weichai has a stronger ability to understand and meet customer needs, such as the launch of a series of new technologies for heavy-duty commercial vehicle power at the beginning of the year, and the layout of this light-weight power. It is the future advantage of Weichai. In terms of product transformation, Weichai has set a full range of suppliers in the whole field and has built a 2L-13L perfect product platform.
In the field of non-road engines, Weichai is strengthening cooperation with various OEMs and has signed strategic cooperation agreements with Xugong, Longgong and Caterpillar (Qingzhou). For Weichai, the future non-road engine will be the main force.
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