January 08, 2025

Weichai: Creating an Industrial Chain Cooperative Advantage

Recently, news about Weichai's strategic initiatives has been frequent.

On November 9th, Weichai Heavy Machinery under the Weichai Holding Group and Chongqing Changhang Company under the China Changjiang Shipping Group (hereinafter referred to as Changhang) signed a strategic cooperation agreement in Jiangjin, Chongqing. According to the agreement, the power system of the new 325TEU container ship will be provided by Weichai in the future.

Prior to this, on October 29, at the Weichai Power Science and Technology Innovation Conference held in Xi’an, Tan Xuguang revealed that by 2012, Shaanxi Zhongqi will achieve a strategic plan of 150,000 vehicles, and Fast will surpass the one million mark.

Since June of this year, Weichai Engine has sold more than 30,000 units a month. In September, it exceeded 40,000 units at one stroke, setting a record high for the same period in history. At the moment of warming up at the beginning of the financial crisis, Weichai was able to achieve such achievements. When it comes to two important measures, one is to insist on a win-win cooperation concept, and the other is to build a core competitiveness that cannot be replicated.

Win-win cooperation concept

The signing of this agreement between Weichai and Changhang marks the full cooperation between China's largest internal combustion engine manufacturer and the largest inland shipping backbone enterprise.

In recent years, the development of Weichai and Changhang has been very rapid and they have become leading companies in their respective fields. In the process of rapid development, the two groups formed a profound cooperative relationship. In 2004, the technical personnel of both parties jointly developed and successfully manufactured the 200TEU container ships with the first-generation full-fired 1500S heavy oil machine as the main ship on the Yangtze River. This type of ship changed the fuel from diesel oil to heavy oil, creating a precedent for the 1500S heavy oil to be burned on the main engine of the small power ship on the Yangtze River.

This achievement not only brings considerable economic benefits to both parties, but also makes a significant contribution to the social energy-saving and emission-reduction work. A single boat from Chongqing to Shanghai can save a cost of 50,000 yuan for a round trip. People in the industry generally believe that Changhang and Weichai hold hands together are real strong alliances.

It is understood that China Changjiang Shipping Group is China's largest inland river backbone shipping company. Changhang Group owns more than 2,800 ships of various types, more than 6 million deadweight tons, and has an annual transportation capacity of 200 million tons. Its Yangtze River traffic accounts for the total volume of the Yangtze River. The volume is about 25%, and freight turnover accounts for about 50%, among which key materials such as ore traffic accounts for about 80% and crude oil transport reaches 100%. At present, the company has also opened up ocean shipping global shipping and dry bulk ocean shipping routes.

Although Weichai’s largest market share is currently in heavy trucks and construction machinery, it should not forget that shipbuilding is its traditional market. While making rapid progress in new markets such as heavy trucks and construction machinery, Weichai Heavy Machinery has never neglected the development of the marine machine market, especially the medium-speed marine engines.

In recent years, Weichai has persisted in cost leadership and technology leadership. It has achieved a market share of more than 75% in the ship machine market below 1,000 horsepower, and achieved a market share of 50% in the 1,000 to 3,000-horsepower shipbuilding market, ensuring its absolute leading position in the major markets. Its medium-speed internal combustion engine has 160 series of 160, 170, 200, 230, 250, 270, 320, 400 and other eight series. It not only occupies a considerable share in the small and medium-sized ship engines market, but also has a good market reputation.

Unreplicable core competence

For Weichai, adversity and crisis have always followed suit. As early as two years ago, Weichai had come up with a strategy to deal with the crisis and had conducted a comprehensive and systematic "physical examination" of the company's strategic direction, cost management, cash flow, and logistics management, and in particular increased the intensity of technological innovation.

Tan Xuguang, chairman of Weichai Holding Group, is also full of confidence in the development of the company. He said that companies must have core competences that others cannot replicate. At the recently held Weichai Power Technology Innovation Conference, he said that the group will increase scientific research investment and vigorously promote the strategy of corporate science and technology.

Currently, Weichai has set up six engine R&D centers around the world to ensure that it is always technically consistent with the international standards, even one step ahead. Weichai took advantage of its own industrial chain to develop the world's first powertrain product for system matching and R&D of engines, gearboxes and axles.

At the same time, Weichai also insisted on cooperation with scientific research institutes. On September 26, Tan Xuguang and President of Jilin University Zhan Tao signed a school-enterprise cooperation agreement. The two sides decided to cooperate in the cooperation of science and technology projects, the establishment of Weichai Power Research and Development Fund, and scholarships.

Tan Xuguang believes that Weichai's core competitiveness is to take "Lan Qing Power" as the core and create a competitive advantage in its product portfolio; to provide professional service engineering as the core and to create competitive advantages in the aftermarket; to use the powertrain system as the core to build the industry. Chains cooperate with competitive advantage.

It is precisely with such core competitiveness. In the face of the crisis, Weichai came over step by step. The international financial crisis has hindered the pace of internationalization of many companies, but Weichai has taken the opportunity to further advance into the international market. In March of this year, Weichai bought a French company with a century-old internationally well-known engine at a low price, and took a shortcut to the international market.

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