Can Fotos Cummins Lead China's Lightweight Diesel Engine Market?


With regard to Foton Cummins , you can describe it in many ways: One of China's largest light diesel engine manufacturing bases, Cummins is a key step in the development of China's business, and Beiqi Foton International operates a strategically strategic layout; you can also use In the future, the forecast will be that it will be the new definition of light diesel engine technology and standards and the latest leader in the future Chinese market.

"No, we have not thought whether Foton Cummins is opening a new era in light diesel engines." Despite the above statement, Deputy General Manager Daisong Gao of Foton Cummins Engine Co., Ltd. was low-key, but he also admitted that the company was just established. On the occasion of three years, the move of the parent company's 100 million U.S. dollars in capital increase was indeed a "must-have for the future high-end light-duty diesel engine market."

On May 6, Foton Motors (600166) announced that the company plans to increase capital by 340 million yuan in cash from Beijing Foton Cummins Engine Co., Ltd., including a capital increase of 165 million yuan in 2010 and a capital increase of 175 million yuan in 2011. At the same time, Cummins Co., Ltd. increased capital of 68 million yuan, including 33 million yuan in 2010, and 35 million yuan in 2011. Cummins (China) invested a total of 272 million yuan in investment, including 132 million yuan in 2010 and 140 million yuan in 2011.

People want to know how this happened. It sounds amazing. In particular, only three years after its establishment, the joint-venture company that has not reached production capacity and has not produced economic benefits has quickly completed the capital increase, and has used all the injected funds for the development and promotion of Euro V and Euro VI engine standards. Considering the introduction period of engine products for 6-8 years and the current status of implementation of China's emission standards, it is impossible for shareholders of both parties to invest in capital and it is impossible to not know what kind of risks they are facing.

However, the determination of shareholders may be very simple to sum up: the development prospects of China's light vehicle market, as well as the opportunities for upgrading of engine technology brought about by the upgrading of emission standards - "China's light vehicle market is a light product for technology upgrades that are severely absent. "The huge demand", which allows any newcomer to have the opportunity to share this very high growth of the interest space.

The fierce competition in high-end light vehicles in the battle for transition is indeed far from comparable three years ago. This makes Foton Cummins not only face competition from established companies such as Yunnei and Yuchai in China, but also competes with rivals who also have a strong technical background.
On August 16, 2007, Dongfeng Chaoyang Diesel Engine Co., Ltd. announced that it has obtained the license from Navistar NV of the United States and will begin production of a new type of NGD 3.0-liter diesel engine for vehicles. This 3.0-liter in-line four-cylinder turbo diesel engine is designed to use an electronically controlled high-pressure common rail fuel system with piezoelectric nozzles. It currently meets Euro III standards and has the ability to upgrade Euro IV and Euro V emissions regulations. It is estimated that the annual production of the engine will reach 40,000 to 50,000 units.

In the same year, Quanchai Power, a listed company in the field of light engines, collaborated with German ELSBETT, BOSCH, and the Shanghai Institute of Internal Combustion Engines to develop Euro III series diesel engines for small-diameter vehicles. Among them, the first Euro III emission 4D22E diesel engine is expected to complete all research and development work in August 2008, and an annual sales income of 600 million yuan will be realized.

In addition, Jiangling had introduced two diesel engines, the R428DOHC and R425DOHC, from the Daimler-Vom M. in Italy in the previous years. The original intention was to replace the relatively backward 4JB1 diesel engine, and 4JB1 was the technology of the Japanese Isuzu Company in the 1980s. The displacements of the R425DOHC and R428DOHC are 2.5L and 2.8L, respectively. The main models featured are Landwind X6, Huang Hai Qi Sheng, Zhongxing Infinity and Changfeng Cheetah. J X 4 D 2 4 introduced the Ford light-duty diesel engine for Jiangling. The project started construction in December 2005.

The challenge of upgrading in the mid-to-low-end light diesel engine makes today's high-end market scramble to become a giant feast. But there is no doubt that Foton Cummins is becoming an insurmountable benchmark for any engine company seeking to find gold in the high-speed development of China's light vehicle market.

Compared with its rivals, Foton Cummins has enough advantages to enable it to lead the transformation of China's light diesel engine market in a shorter time. “This is a model of strong cooperation.” Dai Songgao thinks that Cummins has more than 90 years of experience in the development of professional engines, an accurate understanding of engine trends, and its strong distribution network and brand recognition in the global market, with Futian. The strong domestic distribution capability of the automobile and the market background of the largest light vehicle manufacturing enterprise have enabled the joint venture company to take a clear advantage in terms of products, services, and markets, and to shorten the period for the cultivation of short product markets. In addition, Dai Songgao believes that the joint venture's special cooperation model will make it difficult for its competitors to duplicate: "For three years, both parties have been committed to achieving the stability of production with the strongest lineup in a very short period of time. Meet the quality requirements."

Coster's new rival

In a sense, the immediate changes have plagued the Yutong Group chairman Tang Yuxiang for several years until the problem is solved. High-end light passengers are the most profitable areas in the bus industry, and this area has been monopolized by Toyota Coste. In the passenger bus market in China, this is an absolute accident, and it is also a heart disease for Chinese bus passengers.

In an interview in early 2008, Tang Yuxiang, the head of China’s largest bus company, told the “Car Watch” magazine reporter: “If there is sufficient supporting power for competitiveness, China’s high-end light passengers will be the same as other passenger car products.” Light buses have always been a heart disease for Tang Yuxiang, because Yutong has mastered almost all the core technologies of passenger cars, but it is hard to overcome as the most competitive power system. "The unilateral situation of the Coster family can certainly be said to change," an industry expert told reporters. This has also become a new footnote to the success of Foton Cummins.

“The excellent power system can become the core competitiveness of the entire vehicle company. As a result, the competition focused on the engine field is becoming increasingly fierce.” People think that for Foton Cummins, this is an important moment to surpass and lead the opponent, but in the Dai Songgao believes that more companies have to join the high-end light-duty diesel engine market is not a bad thing, "Futian Cummins hopes to see more competitors, because we can grow together to jointly promote the engine industry, commercial vehicle industry to achieve qualitative improvement. ”

The good news is that in July this year, the Auman Middle Card equipped with an ISF3.8L engine will soon be put on the market. As of now, almost all major domestic light truck companies and light passenger companies, Futian Cummins have already achieved support. The same can confirm the success is for the Brazilian Volkswagen, Korea Daewoo and other overseas customers began to achieve bulk supply. The development of Euro VI products has also become a new competitive force for the export of commercial vehicles in China.

In this feast, Foton Motors and Cummins undoubtedly played an enviable role: long-term strategies, keen eyes and amazing power will not only allow them to gain a lot, but also raise the threshold for the latter entrants. Now, they only need to help the joint venture to solve the following two problems: reduce the price of the product and increase the speed of product improvement in the context of global sharing. This is not too difficult.
View related topics: Beiqi Futian, Futian Automobile brand value of 22.157 billion yuan


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