Just after the Spring Festival, Cummins’ latest joint venture news spread wildly. According to a source contacted by Cummins executives, after a successful joint venture with Shaanxi Automobile Group (herein referred to as Shaanxi Automobile Group), Cummins recently started contact with Weichai Power, the largest high-speed high-horsepower diesel engine manufacturer in the country. To discuss the joint venture, Cummins hopes to use Weichai Power to expand its engine's huge share in China's heavy-duty truck market (Weichai Power is lacking engine technologies that emit more than Euro III).
At the same time, in the light truck market, Cummins is in full swing and Beiqi Foton is in full contact. The two sides are preparing to set up a joint venture for light truck engines. Cummins is focusing on the title of the Beiqi Foton light truck sales championship.
Cummins’s sphere of influence is gradually covering every part of China’s truck market and has caused serious impact on international truck giants who are hesitant to enter the Chinese market. It has even become DaimlerChrysler (hereinafter referred to as Dai-ke). , Germany, Mann's vehicle company (hereinafter referred to as, Man) and other OEMs have strong resistance to localized production in China.
Joint venture with Weichai
Cummins is the world's largest independent diesel engine manufacturer and has been in the Chinese market for more than 30 years. Weichai Power is currently the largest diesel engine manufacturer in China and occupies more than 80% of the market share of heavy truck engines. If the two parties carry out a joint venture, Cummins will have the possibility to equip 80 percent of the heavy trucks on the Chinese market with engines.
"I do not know the details of the negotiations." Chen Dazhao, deputy general manager of Weichai Power, did not disclose more details of cooperation. Cummins has not directly responded to whether it is in joint venture negotiations with Weichai Power. Cummins East Asia market communications manager Yang Fang told reporters: “Because Cummins has established Xi’an Cummins Corporation with Shaanxi Automobile Group, based on Weichai Power’s shareholding relationship with Shaanxi Heavy Truck Company, it is normal for both parties to have some contacts as parent company. It's not normal to touch it."
In a statement to this newspaper, Cummins stated that it is inconvenient for us to disclose our cooperation plans or make inferences and judgments about future cooperation relationships before reaching a decisive agreement.
According to industry sources, this time Cummins's contact with Weichai Power saw a special relationship between Sinotruk and Weichai Power, as well as Sinotruk's position as the top three in the heavy truck market.
China National Heavy Duty Truck is a wholly-owned holding company of Weifang Diesel Engine Factory, a controlling shareholder of Weichai Power. At the same time, Sinotruk has always been Weichai Power's largest customer and accounts for over 40% of its sales. Although the current tension between the two sides, China National Heavy Duty Truck is building its own engine production plant, but in view of the country's capacity control for the automotive industry, the possibility of re-establishing a diesel engine plant of the same scale as Weichai Power in Shandong Province is virtually non-existent.
After the joint venture with Shaanxi Automobile Group, if Cummins can successfully handle Weichai Power, it will take the second place for China's heavy truck three-point vehicle. China's three heavy-duty truck companies only have Chongqing Zhongqi Automobile to go home.
Take Futian light truck
In the field of heavy trucks, the Cummins China strategy is also extending downwards. Cummins once again seized food, and is currently in joint venture negotiations with Dai-ke's domestic partner, Beiqi Foton, for a light-duty truck engine.
The reporter learned that this negotiation has progressed secretly for more than six months, but at present the two parties have not released any news. And why choose Beiqi Foton? The reason is simple, because Beiqi Foton is currently the largest domestic light truck manufacturer. This is Cummins's strategy.
As for the progress of the negotiations between Cummins and Beiqi Foton, Zhao Jingguang, deputy secretary of the Party Committee of Beiqi Foton, said the two parties are still in contact. He told reporters: "If the Foton light truck can match the Cummins engine, then the Futian commercial vehicle industry layout will tend to be complete."
For Cummins, under the joint venture with Dongfeng to produce a 4 litre engine, there are 1 to 3 liters of light truck engines. Cummins is eager to land these engines in China. Beiqi Foton is undoubtedly the best partner.
After a joint venture with Dongfeng, Cummins began to choose a strong local partner to cooperate instead of training partners. Futian Light Trucks sold a total of more than 270,000 vehicles in 2005. Dongfeng Motors, which ranked second, sold only 87,126 vehicles.
"It wasn't us who started the joint venture negotiation with Fukuda, but Dai Ke." Yang Fang said, of course, Cummins is only one of the "woots" companies for Beiqi Foton's achievements in light trucks.
From the current situation, since Beiqi Foton and Dai-Ke have joint ventures and cooperation agreements and are limited to the restrictions on joint venture quotas, this may be the biggest resistance of Cummins and Beiqi Futian joint ventures, because after all, Cummins is only an engine company and cannot Introduced models for Beiqi Foton. However, the joint venture price code of Dai-ke, which can be imported into Beiqi Foton, is surprisingly high, because Dai-ke's requirement is that he hopes to be the largest shareholder of Beiqi Foton as part of Beijing Automobile Holdings.
Cummins perfects Chinese chess game
In 2005, China's truck market experienced a long-term declining trend. In particular, the heavy-duty truck market experienced the first negative growth in eight years, which has caused the foreign truck giant's localized production process in China to be significantly affected.
At the end of 2005, Volvo Trucks canceled its plans to build an engine plant with Sinotruck in view of the continued decline in the market. At the same time, the long-running joint venture and cooperation plan between Mann and Shaanxi Automobile Group was again suspended. Industry insiders believe that the overseas truck giants will not have big moves in the Chinese market in 2006.
This seems to leave Cummings the opportunity to “sew in and outâ€, and Cummins’s Chinese chess game is constantly “attacking the city.â€
In September 2005, at the same time that Cummins and Shaanxi Automobile Group signed an engine joint venture agreement, their joint venture negotiations on the engine and vehicle had been carried out for at least one year between Mann and Shaanxi Automobile Group, but eventually Cummings was killed halfway, and Put in a passive position. This was the first time Cummins had eaten.
According to sources, one of the major obstacles to the joint venture and cooperation between Shaanxi Automobile Group and Mann is that Mann never agrees that the imported models will be equipped with Cummins engines. Man hopes to match his own engine. However, Liu Keqiang, marketing manager of Shaanxi Heavy Gas Group, said that after a joint venture with Cummins, the engines produced by Xi'an Cummins will fully meet the needs of the new phase of the Shaanxi Automobile Group's next phase. Shaanxi Automobile Group will not consider building another engine plant in the short term. .
The "Cheng Jiejin," which was killed halfway, almost completely tore up the possibility of large-scale cooperation between Shaanqi Group and Man. This model is also being copied to Beiqi Futian. If the joint venture between Cummins and Beiqi Foton is successful, it will create uncertainties for the full cooperation between Dai-ke and Beiqi Foton.
The seemingly accidental appearance of Cummins, in fact, hides certain inevitability behind it. Cummins currently has a 50% to 50% joint venture with Dongfeng and Shaanxi Auto. Both parties hold equal shares. Yang Fang said that Cummins does not require holding more than 50% of the shares in the joint venture process. He even said: "We are happy to be supporting actors."
However, the same situation was found in Dai-Ke or Man. The two companies are all OEMs, and they have a full range of products from engines, models, gearboxes, chassis, etc., so to the Chinese partners during the negotiation process. Demanding. One obvious change is that Dai-Kerman has now not only stayed in the requirements of peer-to-peer joint ventures, but also required holdings or holdings, which created the biggest obstacle for cooperation between the two parties.
Cummins has seized the opportunity for foreign automakers to refuse to reduce their identities, and to promote its localized production plans in China on a large scale. Yang Fang believes that even a large engine plant can bend down when negotiating with the main engine plant. After all, the main engine plant is a customer of the engine plant. This also became Cummins's magic weapon. It was time-tested.
If we can finally hand in Weichai Power and Beiqi Foton, Dongfeng, Shaanxi Automobile Group, Weichai Power, China National Heavy Duty Truck and Beiqi Foton will all become Cummins partners. Cummins will have the opportunity to become a heavy truck, Zhongka, and The largest supplier of light truck engines.
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