Eaton China's New War

Changes in the competitive environment and public opinion... This multinational company that has made tremendous contributions to the new energy technologies of commercial vehicles in China is facing new challenges. At this point, technology is no longer the only weapon.

Eaton, a global manufacturer of automotive transmission systems that has been in the Chinese market for 16 years, suddenly discovered that while many years of preparation and preparation have caused China's business volume to double, they have become the focus of conflict.

In the past few months, the Eaton hybrid system is like the most beautiful woman on the ball, and everyone wants to be close to it. Since the beginning of this year, under the stimulation of new energy subsidies and the “Ten City One Thousand Cars” policy, Eaton China’s business volume has doubled and domestic bus companies have approached them to negotiate cooperation matters.

Despite being the earliest example of working with Chinese companies to launch China's first hybrid system for commercial vehicles, the gains in timing were already expected for Eaton, but what they didn't expect was an unfavorable news. One after another.

First, some experts questioned whether the “Eaton Phenomenon” that emerged at the same time as the rapid development of the new energy bus market will cause huge subsidies for new energy buses to flow into “outsiders” and whether the core technology of hybrid cars will be monopolized by multinational companies. For large orders, "Eaton conditions are harsh and require additional payment for technology transfer fees." Based on this, some media have come up with the failure of Eaton's transmission joint venture in China and questioned the lack of Eaton's "technical blockade" of China's strategy.

"People know too little about Eaton." In Zhou Tao's eyes, Eaton is not as tall and out of reach as the outside world has said.

Since May 1, 2008, Zhou Tao has officially become the president of Eaton China. Before he took charge of Eaton China, Zhou Tao worked for 18 years at Alcatel-Lucent and served as executive vice president of China. Now for him, "monopoly" is indeed a headache word.

China Strategy

"Either domestic or foreign, new energy technologies are still in their infancy. The emission standards are rigid, and Eaton's technology is just one of a variety of technologies." On the phone, Zhou Tao told reporters. Eaton is convinced that since entering China in 1993, Eaton is making progress together with the Chinese market and Chinese companies. "We are working together with our partners to apply Eaton's many years of experience to the practice of the Chinese market, constantly improve and give full play to its technical advantages, and work with partners to make new energy projects."

Zhou Tao from the microphone sounded confident. Compared with other competitors, early cooperation with Chinese auto companies laid a foundation for Eaton’s market position. After years of preparation and investment, “This opportunity will not be missed by Eaton.” In the first quarter of the global economic downturn, Eaton China Mixed The power business has still made very good progress. It has already signed orders with domestic manufacturers such as Futian and Hengtong, and negotiated with many other customers. In fact, the Chinese market has tilted Eaton’s global map.

“We should not question Eaton’s China strategy.” Zhou Tao responded to the media’s argument for Eaton’s change of China’s strategy.

In 2008, the failure of Eaton’s (China’s) two joint ventures in the transmission caused concern. People believe that through the failure of the early market, Eaton summed up lessons learned and did a lot of research on China's auto parts consumption environment. At the same time, the market strategy of Eaton (China) has also changed.

For this argument, Zhou Tao denied: “This is not a strategic change.” His explanation is that when a company is implementing its development strategy, it can adopt many ways, and it does not change as time goes by. If the closure of the joint venture is beneficial to shareholders, customers, and employees, and can make Eaton pay more attention to core business, why don't we do this? "In fact, after closing the joint venture company, Eaton and its former partners still maintain Good relationship."

Zhou Tao re-emphasized that in the face of a fierce competitive environment, “Eaton needs to actively cooperate in the initial development of the market. It is hoped that through the joint efforts of its partners, it will continue to improve its technical advantages.”

In any case, 2009 will be Eaton’s new test. In this year, Zhou Tao needs to prove that he and his Chinese team have the ability to stick to the first-mover advantage among many opponents, make Eaton based on the Chinese hybrid business and achieve greater success, as proof of the previously defying Eaton China. The strategy is correct.

Winning sleepy

Many public opinion is pushing Eaton to the opposite of Chinese parts companies. In fact, Eaton has been unable to avoid the leading technological advantage and the hidden problems under greater market ambitions.

"Technology transfer fees are just a way for Eaton to partner with a partner, not what the media says is a fixed fee Eaton charges to partners."

30 years ago, Eaton began to theoretically develop new energy technologies. Ten years ago, Eaton put its research results into practice in the United States. Since entering the Chinese market in 1993, Eaton has accumulated for many years, gradually diversifying the market and products. "Mastering the core technology and continuously innovating are the vitality of the company. This is true for Eaton, and for Chinese companies."

In the field of commercial vehicle hybrid power, the study of core technologies by local Chinese companies has never stopped. Regarding domestic counterparts, Zhou Tao’s opinion is: “For Chinese companies, new energy is a huge leap forward. This technology brings equal opportunities and local companies are all common development.” Because of new energy research On the other hand, the gap between domestic and foreign start-ups is relatively small, and it is quite different from traditional energy technologies. Even multinational companies start from scratch.

Despite deep recognition of Eaton’s product technology leadership, some experts said: “It is not suitable for the status quo of China's auto industry development.” The reason is that Eaton products are in line with China's new energy bus development, but it does not meet China’s current national conditions, and the product price Generally higher.

At present, the challenge facing Eaton’s new energy technologies is how to apply mature technology from abroad to the domestic market as soon as possible. Eaton will also continue to improve its core technology as production increases. "Eaton's purpose is to choose more suitable among multiple technologies." This is Zhou Tao's plan for the future.

But is this all the challenge?

Frankly speaking, Eaton, which is changing for China, has already inspire China's commercial vehicle market with new technology before encouraging the introduction of policies, and has responded to and led the market demand after the introduction of the policy. However, it is quite difficult to continue to complete this multi-faceted integration. Outside of technology, Eaton needs to go through a process of continuous infiltration with the Chinese market and Chinese partners. If we say that China has brought about changes to Eaton, an active localized image should be an important lesson.

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