In fifteen years, for a period of not too short or long, for Weichai Power, it is fifteen years to achieve leapfrog development. Fifteen years ago, Weichai was still an old state-owned enterprise that mainly produces diesel engines. Today, Weichai has grown into a global multinational group. What has Weichai done in the past 15 years?
In the opinion of the reporter, in the past 15 years, Weichai Power has no choice but to attack the main business. By leveraging the power of capital, we have continuously adjusted the industrial structure around the powertrain, and successfully built the three major gold powertrains, hydraulic power system and intelligent logistics. The industrial chain is particularly commendable.
Weichai Group
Heavy-duty commercial vehicle powertrains move toward international innovation
In 2005, Weichai Power developed the first powertrain for the global heavy truck industry by integrating the three key components of Weichai Engine , Fast Transmission and Hande Axle . Since then, Weichai Power has transformed from a single engine manufacturer to a powertrain system supplier, not only in the global industry, but also from the running to the run, leading, and reversing China's lack of heavy-duty powertrain core technology. The dilemma has effectively prevented the market penetration of foreign heavy truck companies.
According to statistics, in the past three years, Weichai Powertrain products have realized sales revenue of 91.2 billion yuan and added profits of 10.94 billion yuan. The products are widely used in various fields of heavy commercial vehicles. The domestic market share is 70%, and the production and sales volume ranks first in the world, which has achieved huge economic benefits.
"After absorbing and merging the torch, other companies may be able to copy, but a group that we have gathered together, no company can copy, this is the unique deep competitiveness of Weichai." Tan Xuguang said.
Unyielding, attacking the main structure, adjusting the results
In the latest data disclosed by Weichai, we can see that in 2018, the company's engine sales totaled 669,000 units, an increase of 8.5% year-on-year; among them, the high-power 12/13L engine with absolute lead sales sold 220,000 units, an increase of 1.6% year-on-year. It accounted for 32.8% of the total engine sales; the total sales of transmissions was 909,000 units, an increase of 8.9% year-on-year; the cumulative sales of axles and bridges was 650,000, an increase of 6.8%.
Hydraulic power system leads the industry to high-end
In the "golden period" of heavy trucks in China, the business model of Weichai's heavy commercial vehicle powertrain has achieved huge economic benefits, but Tan Xuguang has not satisfied it. With the 2008 financial crisis sweeping the global storm, Weichai has opened the pace of overseas bargain-hunting. It is worth mentioning that Weichai's "buy, buy and buy" model is not blindly attacked. Each of its mergers and acquisitions is centered on its own core products, which has played a huge role in building a unique industrial chain for Weichai.
In 2012, the restructuring of Germany Linde Hydraulics, Weichai Power is looking at its world's leading hydraulic technology. Weichai Power took Linde Hydraulics down, and did not simply develop the hydraulic business market. Instead, it innovatively proposed the integration of the two core technologies of “power + hydraulics†and the first industry to create a “hydraulic power systemâ€.
In 2015, the joint venture company, Linde Hydraulics (China), went into production and the company quickly launched hydraulic power system products in the Chinese market. The product is not only reliable due to its reliable quality, comfortable operation and rapid response, but also greatly improved in work efficiency and economy. It has harvested a large number of customers in the construction machinery and agricultural machinery market.
Tan Xuguang, Chairman of Weichai Group
Driven by the "hydraulic power system", Linde Hydraulics (China) has doubled its sales performance for four consecutive years since it was put into production, and has ran out of development "acceleration." With the acceleration of the localization process, Weichai Hydraulic's production process and processing precision have gradually met the performance requirements of world-class hydraulic components. Since 2018, some of the castings and processed parts of Linde Hydraulics have been sold back to Germany in batches, and the quality of the products has been highly recognized by German customers.
In the financial report of Weichai Power, the hydraulic system went hand in hand at home and abroad, and continued to maintain rapid growth. Linde Hydraulics (Global) sold a total of 187,000 units, a year-on-year increase of 15.7%. The operating income was 2.34 billion yuan, up 15.7% year-on-year; Linde Hydraulics (China) sold 20,000 pieces, up 63.9% year-on-year; realized operating income of 250 million yuan, up 74.3% year-on-year.
What Tan Xuguang values ​​is also the field of engineering machinery powertrain, which contains huge profit margins. He likes to compare it to “gold mine†with humor. Based on the idea of ​​integrated research and development, Weichai Power integrates Linde technical resources to jointly develop hydraulic power systems. Through the adaptive matching of the engine and hydraulic system, the optimization of work efficiency and fuel economy, as well as the automatic "optimal matching" of the system. These key technologies are the basis and key to the future intelligent and high-end mechanical equipment.
Emerging logistics industry chain layout intelligent large market
"Enterprises must make money," Tan Xuguang stressed. According to industry forecasts, in the next 10 years, the intelligent logistics market will maintain a CAGR of 6%, and the total market is expected to reach 870 billion yuan or more. Weichai lost no time in marking this big market.
If we say that the integration of Linde Hydraulics, Weichai Power's starting point is to break through the monopoly and use high-end technology to shake the market, then strategically reorganize Germany's KION, support KION's wholly-owned acquisition of Dematic, Weichai Power is intended to lay a new Industry chain.
KION Forklift is the world's second largest, Europe's largest provider of forklift production and warehouse technology services, with operations in more than 100 countries. Dematic is the world's third-largest provider of automated logistics system solutions in Europe and America. It has a globally distributed engineering center and manufacturing base with more than 100 locations in 22 countries around the world. With a leading position in the US, Europe and other parts of the world, it has provided more than 4,500 integrated systems for large, medium and small businesses in many industries around the world, including the fastest growing e-commerce industry.
Weichai Power integrates the two to provide a complete system of internal logistics 4.0 solutions to customers around the world.
Weichai Power's 15th Anniversary and Innovation Development Exchange Meeting
As a result, Weichai Power uses the parent company resources and automated logistics as two serial points to construct the intelligent logistics industry chain of “Kaiao Material Handling + Dematic Automation Logistics†to create a unique closed loop of the entire industry chain and become an intelligent logistics. The market leader in total solutions. Since 2016, the intelligent logistics industry chain has contributed considerable sales and profits to Weichai Power every year.
In the past 15 years, Weichai Power has developed a unique new and old kinetic energy conversion path through structural adjustment, successfully cracking the "saddle curve" and achieving leap-forward development. The strategic logic behind it has been praised by the industry as “strategic Rubik's Cubeâ€. In this “Magic Cubeâ€, the solid “Golden Triangle†consisting of three major gold industry chains: powertrain, hydraulic power system and intelligent logistics is collaborating with innovation. Strategies such as internationalization, new energy, and intelligence have promoted the efficient operation of Weichai Power and ran to a broader development path.
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