"When Sinotruk is divided into three parts, I predict that the three companies will likely come together within five years. Now it seems a bit of a sign." Tan Xuguang, chairman and CEO of Weichai Power, used this opening statement to describe Weichai purchased the torch.
He said that "one divides into three" refers to the early years due to historical reasons, China's heavy truck division was "Shandong China Heavy Duty Truck", Shaanxi Heavy Duty Truck, Chongqing Heavy Duty Truck, and Shaanxi Heavy Duty Truck was controlled by Hunan Torch.
Tan Xuguang stood from the table of the big ring conference and faced the slide screen on the other side of the table. He held a small red flashlight and talked for more than an hour. This is the first time he has spoken so many words to the media and since Weichai Power acquired the torch in Hunan, Weichai has responded positively to the media for the first time.
On November 24th, Huarong Asset Management Co., Ltd. and Weichai Power jointly announced that 28.12% of the shares of the largest torchholder of the Hunan Torch held by the original Delong-based company managed by Huarong had been approved by the China Securities Regulatory Commission. Successfully completed transfer of equity transfer to Weichai Power (Weifang) Investment Co., Ltd.
The intention was that "Weifang Power has never said to do a complete vehicle, and will not do a full vehicle afterwards." The real reason for Weixiang's speculation about the acquisition of the Hunan Torch by the media is that it has entered the vehicle manufacturing field. Tan Xuguang firmly denied it. . “Our main focus is on the spare parts industry of the Hunan Torch. The goal of Weichai Power is to become the world’s largest auto parts manufacturing base.â€
Tan explained in detail that Weichai Power and Hunan Torch have market complementarity and mutual action. The main products of Hunan Fast Gear Co., Ltd. under the Hunan Torch Group are currently concentrated in the heavy-duty automotive sector and currently account for 90% of the domestic heavy-duty truck market with 15 tons and above; Weichai Power holds over 80% market share in the 15-ton heavy truck engine sector. In addition, Weichai Power has the most complete and most intensive service organizations compared with similar domestic companies (having 78 overseas offices and more than 1,100 special service centers). From this perspective, both parties are complementary to each other in the heavy truck market. .
"A product of a company only has a high market share in the only market and there is a great risk," said Tan Xuguang. This sounds contradictory to the above analysis. Tan later explained that both Faster Gear and Weichai Power are two different products. Although they all have a large market share in the heavy-duty automotive industry, they have no risk due to their brand-only production, technology-only production and independent channels. Only through the integration can produce mutual synergy.
Tan Xuguang had early thought that independent engine manufacturers would encounter a certain crisis after 20 years. This is exactly what the practice of European and American countries and industry associations predict - the development of auto factories and independent engine factories. The competitive cooperation will gradually change, which will bring great risks. The solution to this risk is to reduce the weight of independent engines and to diversify horizontally and vertically.
Tan Xuguang explained that after Weichai Power completed the acquisition of the Hunan Torch, it had a complete vehicle industry chain resources, from a single engine manufacturing to a complete auto parts manufacturing company.
"Before 2010, whoever puts on the engine will be burdened by the betting engine." Tan Xuguang suddenly inserted this sentence when talking about the economies of scale of the company. "I'll bet that the next year, the year after, the year after In one year, one of the foreign engines could not be produced in China, because at least three years are required to achieve the production of engines in the country. Normally, it will normally be five years."
Tan's remarks are not noticeable to a background: In February of this year, Shaanxi Automobile Group and Cummins signed a feasibility study agreement to establish a 50:50 joint venture engine company in Xi'an. Currently, 95% of the engines of Shaanxi Heavy Duty Truck are from Weichai's Steyr series. Shaw Zhongqi and Cummins plan to jointly set up an engine production line, which will objectively get rid of the status quo of over-reliance on Weichai in the core components.
In his view, the subsequent investment in engine production is extremely high, and only advanced detection systems will have to invest several tens of billions. Moreover, engine production must go through three stages: assembly, finishing, casting, and especially the casting process, which is extremely important. The ability to reduce costs depends on this.
However, Tan still responded positively to the cooperation between Shaanxi Heavy Duty Truck and Cummins: "We have always respected the development needs of Shaanxi Heavy Duty Truck and related parties, and we have always handled the problem in a market-oriented manner. We actively cooperate with Shaanxi Heavy Duty Truck Co., Ltd. Bigger."
Previously, the market had been speculating that China National Heavy Duty Truck's attempt to go to Hong Kong as a whole was subject to the opposition of Weichai Power and pushed it again because China National Heavy Duty Truck intends to incorporate Weichai Power into future Hong Kong listed companies. in. Talking about the relationship between Weichai Power and CNHTC, Tan Xuguang replied that their relationship was very good, and that the CNHTC Board of Directors voted in favor on the acquisition of the Hunan Torch, even if there were some differences, it was only In normal business interests.
“ Among the customers of Weichai, China National Heavy Duty Truck dominated in 2004. I personally believe that there will be important changes in this pattern in the next three years.†Tan Xuguang's remarks are profound. ■Reporter Yin Yongzhu Weifang Report
View related topics: Assembling: Auto Parts Giants Hunan Torch
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