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After six years in hand, the cooperation between Beiqi Foton Motor Co., Ltd. (hereinafter referred to as Foton Motors) and Cummins, the US power equipment manufacturer, will deepen.
A few days ago, the reporter learned from Futian Automobile and Cummins China that the large-displacement engines produced by Beijing Foton Cummins Engine Co., Ltd. (hereinafter referred to as Foton Cummins) will be mass-produced in May this year, and will not only be carried to Fuman Auman in the future. Heavy trucks will also be exported overseas.
In this regard, it is believed that the enhanced cooperation between the two parties will not only help Cummins increase its market share in China, but also help reduce Foton's reliance on external suppliers in heavy truck engines and achieve better cost and quality control.
The market share of engine production companies represented by Weichai has declined as heavy truck companies have sought to “vertically support†the core components. The data shows that the market share of Weichai in the heavy truck engine sector has dropped from 40% in 2010 to 36.2% at the end of 2013.
The large-displacement engine will be put into operation . “This cooperation between Futian and Cummins is a matter of course.†An analyst who has long focused on the heavy-duty truck industry believes that since the two sides had a good cooperation foundation in the small-displacement field, the cooperation will be invested in facilities. It can even be simplified to "introducing a production line," but its significance goes far beyond that. He said, "On the one hand, Cummins can use this to increase its market share in China. For Foton Motor, this cooperation is also expected to solve the problem of the delay in the production of Mercedes-Benz OM457 products in the joint venture process with Daimler. Make up for Futian's "blank" in the field of large displacement engines."
“For the entire vehicle company, the lack of core parts not only means the weak voice, but also the loss of profits.†Independent Automotive Analyst Tian Yongqiu told the “Daily Economic News†reporter, “Compared to the entire vehicle, the engine's The profit rate is more than twice that."
Foton Motor's 2013 semi-annual report showed that the company's heavy truck product gross margin was only 7.76%. The Dongfeng Motor's 2013 annual report shows that the gross profit rate of its Dongfeng Cummins Engine reached 21.28%.
As early as 2003, after the failure of the joint venture project between Daimler and FAW Liberation, Beiqi Foton tried to seek cooperation with Daimler. One of the major demands was the introduction of Mercedes-Benz OM457 engine products. However, ten years later, although Beijing Foton Daimler Automotive Co., Ltd. was established in 2012, this engine still failed to be put into operation within the joint venture company.
In 2013, Foton heavy truck sales increased by 32% year-on-year to 115,000 units, making it the first camp of the heavy-duty truck industry, along with Dongfeng, FAW and CNHTC. However, at the same time as sales volume increased, the lack of engine products became a short board for Foton Motor.
From the current point of view, not only the four heavy truck companies in the first tier mentioned above have their own engine suppliers, but Jianghuai Automobile in the second tier has also held hands with Navistar several years ago. Displacement engine preparation.
"The conservation of Daimler's core technology is the direct reason why Foton seeks to cooperate with Cummins." The above person told reporters. The data shows that the current Mercedes-Benz's flagship product, Actros, matches the OM510LA and OM502LA series, while the OM457 series is equipped with the economical heavy truck Axor.
“The production of Beiqi Foton will be put into production with two products of 10.5L and 11.8L, both of which are based on the specific needs of the Chinese market. This will not only meet more stringent emission requirements in the future, but also improve fuel efficiency. The product has a greater improvement." Cummins China related sources told reporters.
"The cooperation between Foton and Cummins in the field of large-displacement engines will probably indirectly bring pressure to Daimler to encourage the latter to introduce more advanced products." Tian Yongqiu believes.
Weichai seeks "breakout"
Weichai Power's 2013 annual report shows that at present, Foton Daimler Motors is Weichai's largest customer. In 2013, Weichai contributed RMB 6.708 billion in orders, accounting for 11.5% of its total sales. "If you lose the customer of Foton Daimler, Weichai will be affected." Tian Yongqiu thinks.
In the absence of a large-scale self-built engine plant, even without Foton Motors, Weichai can still combine other OEMs to digest production capacity. An insider of China National Heavy Duty Truck said, "Like losing customers of heavy truck that year, Weichai can still fill the market gap through cooperation with Foton and FAW."
"This type of technique may not work in the future." Analysts in the heavy truck industry said. In recent years, heavy truck companies in the first and second camps have all built their own engine plants to seek "vertical support." If Dongfeng is behind Cummins, it will cooperate with Volvo and Renault in the engine field, and JAC will also introduce Navistar's products. What followed was the gradual decline in the market share of Weichai in the supporting market. The data shows that in 2010, Weichai’s market share in heavy-duty engine support was 40%. By 2013, this figure had dropped to 36.2%.
Therefore, although Weichai's net profit soared by 19.38% year-on-year to reach 3.571 billion yuan in 2013, Industrial Securities analyst Li Guiping and Wen Sheng stated in their report that “the speed of the downstream automaker’s own engine (company) Accelerate the company's domestic business will be under pressure."
“Weichai still has an absolute advantage in the heavy-duty engine supporting field because the current mainstream consumption of heavy-duty trucks in China is still concentrated in the low-end market of 400,000 yuan or less,†an engine manufacturer official told reporters, “but with the emission standards With stricter standards and user demand for heavy-duty trucks, automotive companies are also seeking more advanced engine products."
According to this person, before this, the Auman series were equipped with imported Mercedes-Benz OM457, Cummins and Weichai engines at the high, middle and low end of the series. However, in the past two years, Futian-related persons have contacted the above-mentioned companies several times and hoped to purchase some of these products. The company’s engine replaces the original Weichai products. “Accordingly, in recent years, Weichai has also accelerated the research and development of new products, as well as technological upgrading of existing products, trying to create another battlefield and change the pressure of survival that is confined to the engine sector.â€
After brewing for a long time, Weichai entered the passenger car market last year and launched the “Yingzhi†brand. Although industry insiders unanimously stated that under the current background of fierce competition in the passenger car market, Weichai’s “cross-border†entry into the future is hardly optimistic. "But for Weichai, it is also a helpless move." Tian Yongqiu thinks. 