Yuchai problem

As the only domestic mainstream independent engine manufacturer, after the fifth time in 2007, the first production and sales of the internal combustion engine industry, Guangxi Yuchai Machinery Co., Ltd. (hereinafter referred to as Yuchai) is facing new challenges: in the increasingly competitive In the “Red Sea”, the domestic sales base has been very large, and it is particularly difficult for Yuchai to maintain double-digit growth. How to find the next fast-growing point?

January 20, 2008, with Yuchai's new strategic plan surfaced, Lin Yuxing, the overseas marketing director of Yuchai, who was newly appointed, officially debuted at the 2008 Marketing Service Conference. This puzzle is gradually being solved. open.

Puzzles

Judging from the data held by reporters, in early 2007, Yuchai’s goal was to “guarantee 330,000 units and compete for 350,000 units.” In fact, Yuchai achieved 383,688 units of engine sales in 2007, a year-on-year increase of 35%, of which trucks and passenger car engines were 230,000 units and 80,000 units, respectively, far exceeding their expected targets.

The blowout of the market was not expected by most engine companies. The booming production and sales also made Yuchai face new problems.

The first and foremost is to find the next fast-growing point.

The second is how to establish a new benchmark. The establishment of a benchmark is actually a process of reorientation. In 2005, Yuchai’s parent company, Yuchai Group, put forward a strategic plan of “rebuilding a Yuchai for three years”. By 2008, it will achieve a total output value of 20 billion yuan. According to this plan, the completion of the goal is almost undoubted, because Yuchai Group’s sales revenue has exceeded 18 billion yuan in 2007, and Yuchai Machinery Co., Ltd., which is the Group’s core business segment, has contributed more than 60 %. "The company's sales target for 2008 is 430,000 units," Yuchai executives said.

As a result, under the circumstances that the “Year of Restructuring of the Three-year Restructuring” project (2008) is no longer too suspense, how to determine the new strategic goals and competitive benchmarks in the next 5 to 10 years will become “shrouded” in Yuchai. There is no "body" puzzle for an independent engine company that a large vehicle company group can rely on.

Problem

How will Yuchai solve the problem?

“Excellent Quality, International Yuchai” is the new strategic positioning put forward by Yuchai’s senior management team at the 2008 Marketing Service Conference. This means that Yuchai should vigorously expand overseas markets on the basis of further improvement in quality. The deeper meaning is that Yuchai needs to align itself with well-known Chinese brands and China's largest internal-combustion engine company to the world-renowned brands and large multinational corporations.

The reporter noticed that at the conference, Li Tiansheng, general manager of Yuchai, Wu Qiwei, deputy general manager of marketing, and Lin Jianxing, who took office soon, interpreted Yuchai’s overseas strategy from different perspectives. High-level attention has led Yuchai to shift from a pure product export strategy to a comprehensive international strategy.

“Why should we propose superior quality, Yuchai International?” Li Tiansheng explained, “If Yuchai wants to become an internationalized company, it must enter the global economic cycle.” “This requires us to go from the market, organization, and talent , management, branding and production must be internationalized."

According to reports, under the guidance of the idea of ​​internationalization strategy, Yuchai carried out system planning and adjustment. “The company will establish an overseas business unit in 2008 and an overseas subsidiary in 2009. The market development will be based on the combination of overseas offices and business representatives, combined export, self-export, and agency exports. Overseas offices will be increased this year. To 20, the number of business representatives increased to 80, and dealers increased to 60.” Lin Jianxing told reporters that Yuchai plans to use Asia, Africa, and Eastern Europe as target markets by 2010, focusing on breakthroughs in Southeast Asia, and strive to achieve by 2010. The engine exports 100,000 units a year, which accounts for 20% of annual sales. From 2010 to 2015, it plans to enter the markets of developed countries such as Western Europe and North America. By 2015, it will achieve annual export of 300,000 engines, accounting for 30% of annual sales.

Opportunity or challenge

The positioning of a large multinational corporation group is an important symbol of Yuchai's quest to align with Cummins, the largest independent engine company in the world. In 2006, Cummins of the United States sold 11.36 billion U.S. dollars in total sales of 833,000 engines, of which 397,000 were sold in North American headquarters, accounting for only 47.6% of total sales. Overseas sales and production accounted for 52.4%. Cummins's experience shows that looking at the world is the only way for independent engine companies to become bigger and stronger.

At present, the gap between the two parties is very clear. But what we need to see is that the gap is also the potential, the driving force, and the opportunity. In 2007, China's commercial vehicle exports continued to be optimistic. The annual export volume exceeded 300,000. The parts and components manufacturers supporting the entire vehicle export are also rising. According to the data, Yuchai exported 29,599 engines in 2007. In 2008, Yuchai plans to export 50,000 units, an increase of about 20,000 units, and the contribution rate of Yuchai's total annual sales target of 430,000 units in 2008 will exceed 40%. It can be said that the bright prospects for the export of commercial vehicles in China will lay a good foundation for Yuchai’s export strategic planning.

Even so, there are still challenges behind the opportunity. Yuchai was not the first company to establish an overseas business unit for engine companies. However, taking the status of exports to such a high level, Yuchai has set a precedent in the domestic engine industry. As an engine for intermediate products, how to achieve more breakthroughs in self-operated exports, how to cooperate with vehicle companies in overseas services, how to increase exports while striving for technology exports and capital exports, and how to enhance overseas brand image are all based on jade Chai can not avoid the problem.

At the same time, in the domestic market, although Yuchai has consolidated its position as the top spot in the internal combustion engine industry, its advantages in the State III electronically controlled diesel engine market continue to expand and the product line continues to improve; however, on heavy machines, Yuchai’s influence Still weak, sales of 280-horsepower or more YC6L and YC6M heavy-duty diesel engines totaled 26,000 units in 2007. Although the year-on-year increase was high, the base number was still too low, which would inevitably affect Yuchai’s product structure and strategic direction.

postscript

After the Yuchai Euro V diesel engine was successfully developed and unveiled, the reporter once had a short-term question: When China's national III emission standards have not yet been fully implemented, Yuchai is on the horse and is a technical gesture. Still want to really achieve sales?

This question was answered after reporters participated in Yuchai's marketing service conference in 2008: Targeting overseas developed markets may be Yuchai’s main intention to develop Euro V engines, and it is also an important “game piece” for Yuchai’s internationalization strategy. In addition to demonstrating technological advancement and building a brand image, Yuchai also hopes to “test water” the European and American markets; in particular, as China’s commercial vehicles gradually enter the developed markets of Western Europe, North America and other countries with strict emissions, Yuchai takes the lead. The development of an engine that meets Euro V emission standards will not only help to obtain the advantages of supporting complete vehicles for export, but also advance the "training" to meet the needs of future domestic and foreign engine industries with higher technological content and stricter emission standards, and to obtain more. More engine actual operating data and vehicle matching experience.
View related topics: Yuchai won the "China Brand Annual Award NO.1" (internal combustion engine) title in 2007

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