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As the deputy general manager of Foton Motor and the head of the international cooperation business, Zhang Xiyong participated in the negotiation of major international cooperation projects of Foton Motor. On June 9, at the launch ceremony of 400,000 engines of the Beijing Foton Cummins Engine Co., Ltd., he received an interview with the media about the cooperation between Foton Motor and Cummins.
Media: As the deputy general manager of the international cooperation business of Foton Motor, you participated in the negotiations between Foton Motor and Cummins. Please briefly talk about the cooperation between Foton and Cummins.
Zhang Xiyong: In 2004, Foton Motor and Cummins began cooperation. At that time, some models of Foton Motor used Cummins heavy-duty diesel engines. In early 2005, the two sides started to discuss strategic cooperation and preliminary discussions on the possibility of cooperating in the establishment of a light diesel engine manufacturer in a complementary and win-win manner. In July 2005, they signed a strategic cooperation framework agreement and letter of intent to establish a joint venture company. Through joint efforts of both parties, Beijing Futian Cummins Engine Co., Ltd. (hereinafter referred to as “BFCECâ€) officially obtained the business license on October 26, 2007. BFCEC became the first Sino-foreign joint venture company of Foton Motors, and it is Cummins’ largest overseas investment project, making it a global light engine production base.
It should be said that the cooperation between Foton Motor and Cummins has been going smoothly. This is mainly due to the encouragement of the national policy industry, the open and win-win cooperation between the two parties, and the support of leaders at all levels. Due to the development direction of the modern manufacturing industry, the project was also listed by the Beijing Municipal Government as a key construction project in Beijing in 2008 and 2009.
Media: Prior to the cooperation between Foton Motor and Cummins, Foton had a certain amount of engine resources. Why did you choose to enter the mid-to-high end light engine area?
Zhang Xiyong: This is the choice of global policy environment changes and the global development strategy of Foton Motor. There are mainly the following reasons:
First, meet the needs of increasingly stringent global emissions regulations. As China and countries around the world place increasing emphasis on the environment, and emission requirements are increasingly stringent throughout the world, the Chinese government has also introduced a number of measures to encourage energy conservation and emission reduction. Against this backdrop, Foton Motors urgently needs a technologically advanced engine that meets the requirements of emission regulations in the global market. Although Foton Motor already has certain engine resources, upgrading to higher emission standards is technically difficult and costly. Satisfy the needs of Futian Automobile's entire vehicle power upgrade.
Second, to meet the needs of Foton Motor's global market competitiveness. The technologically advanced engine is the core resource of auto companies. In the face of an increasingly competitive global market, in addition to having more scale advantages than competitors in the global market, we must also grasp the core resources of competition to achieve unsustainable human and sustainable development capabilities.
Third, meet the needs of the realization of the global goal of Foton Motor. During the "Eleventh Five-Year Plan Period", Foton Motor aims to achieve a goal of overseas export sales reaching 20% ​​of total sales volume. Although Foton Motors is currently China's largest commercial vehicle manufacturer and the world's second-largest commercial vehicle manufacturer, compared with Japan, South Korea, Europe and the United States auto companies with advanced engine resources, Foton auto vehicle products still need to pass technical upgrades. It has more advantages in technology and quality than its competitors in the global market. To this end, Foton Motor has developed high-end light commercial vehicles such as Omar and other high-end markets in the world, but it is in urgent need of high-end engines equipped with them.
Media: Why did Fukuda choose Cummins as a partner?
Zhang Xiyong: First of all, Foton Motors and Cummins are able to complement each other with strategic advantages. Foton Motors is China's largest commercial vehicle manufacturer and the world's second-largest commercial vehicle manufacturer. It has strong market resource advantages such as sales and after-sales service network in its entire vehicle; Cummins is the world's largest independent automotive engine manufacturer. In terms of engines, the company not only has a huge global sales and service network, but also has more than 500 distribution agencies and 5,200 distributors in 190 countries and regions around the world. It also has world-leading technology and R&D capabilities. Therefore, the cooperation between the two parties is a combination of strong and strong cooperation and complementary advantages.
Second, Cummins has a long and successful market operation experience in China. Cummins was one of the earliest multinational companies to come to China after the reform and reform of China. In China, it has successfully established 15 wholly-owned or joint venture companies, and has a good momentum of development in the country. The products have good performance in the market. And it is very sincere to China's partners. It is the first foreign-funded engine company to establish a China R&D technology center.
Third, Futian Automobile and Cummins corporate culture can be well integrated with each other. Both parties not only follow the concept of cooperation and win-win, but also the company's vision, goals, business strategy and business philosophy are very close, which laid an important foundation for the successful cooperation between the two sides.
Media: Today, the Foton Cummins engine was officially put into production. This is the result of the joint efforts of Futian and Cummins. For Cummins, it is possible to further share the market opportunities brought about by China's economic development. What do you think that the production of the Foton Cummins engine will mean to Fukuda?
Zhang Xiyong: The two sides are a win-win cooperation. While the project brings Cummins business growth in China, it will certainly bring development opportunities to Foton Motor.
First of all, it brought Futian an advanced technology and high environmental protection engine product. With advanced engine products, Futian Automotive has provided high-end vehicle products for development and laid the foundation for the implementation of the new energy strategy of Foton Motor.
Second, improve Foton's technology R&D and innovation capabilities. Cummins is a company that focuses on local technological innovation. Cummins has produced 18 series of 11 engine products in China. The 2.8L and 3.8L products in BFCEC are products developed by Cummins exclusively for Foton Motor. Through digesting and attracting Cummins technology, it will not only improve Foton Motor's future engine technology R&D capabilities, but also improve Foton's vehicle product R&D and innovation capabilities.
Third, we have improved Foton Motor's global operating capabilities. Cummins has tremendous operational management capabilities globally. Through the operational management capabilities of Foton Motors and Cummins, it has successfully implemented the BFCEC. Futian Automotive will use Cummins' experience to improve its global operating capabilities.
Fourth, the use of Cummins global market resources to accelerate the global development of Foton Motor. Cummins will provide global sales and after-sales service for BFCEC products, and will also provide global after-sales services for Foton Automotive products equipped with BFCEC products, which will provide Futian Automotive with more extensive coverage of the international market.
Fifth, improve the global competitiveness of Foton Motor. Through cooperation with Cummins, Foton Motors uses the global brand recognition of Cummins to increase the global recognition of Foton Motors and its product brands. In addition to the support of Cummins global technology, market and other resources, Foton Motor is bound to increase its global market competitiveness.
Media: Since BFCEC is the result of strong alliances, what do you think that Foton Motors and Cummins can bring competitive advantages to BFCEC?
Zhang Xiyong: First of all, to ensure the advanced nature of BFCEC products. 2.8L and 3.8L products are the world's most advanced light-duty diesel engines. They have a high starting point (the investment can be achieved in Europe IV) and have great potential (up to Euro V, Euro VI emission standards). Compared with the current global competition, because of its modular design, compact structure, fewer parts, high reliability, simple processing technology, and more advanced technology, in particular, Cummins strong technical research and development capabilities, to ensure the BFCEC research and development capabilities and sustainable Development ability;
Second, make BFCEC products have cost advantages. BFCEC is the largest project of Cummins' overseas cooperation and investment, and is currently the world's largest engine plant. Its production scale can reach 400,000 units per year. Because of economies of scale, BFCEC products have a large cost advantage.
Third, ensure that BFCEC has a strong operating capability. Foton Motor has strong operating and management advantages in the commercial vehicles. Cummins has excellent operational advantages in the engine side. The combination of both management and operation capabilities provides BFCEC with a powerful operation management platform.
Fourth, to make BFCEC have the advantages of resources for rapid business development. BFCEC can make full use of Foton Motors, Cummins's market, technology and management resources, not only can quickly enter the global market, but also has sufficient resources to ensure the rapid expansion of the global market.
Overall, the formation of a joint venture is an important way for Foton Motors and Cummins to realize the globalization of their respective companies. Formal production is one of the important achievements of our global development. In the future, both of us will further strengthen communication and cooperation, exert the synergy effect of the automobile industry chain, and jointly develop a new win-win situation.
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