“Weichai experience” of Chinese enterprises going to overseas with confidence
On December 2, 2018, the annual Shandong Heavy Industry Weichai Power 2019 business conference was successfully held in Xi’an, Shanxi Province. More than 900 overseas distributors and agents from all over the world came together to share the achievements of Shandong Heavy Industry Weichai Power Development, to share their successful experiences, to study the development ideas in the new global economic environment.
Step by step, Weichai overseas business to achieve new breakthroughs
In the increasingly complex global economic environment, Weichai overseas business has made remarkable achievements, maintained high-speed development, in a number of areas to achieve breakthroughs, this is the third consecutive year to achieve substantial growth.
In addition to the remarkable import and export business, Weichai overseas plant, investment cooperation, technology export, and other projects have made major breakthroughs. On November 18, the WEICHAMAZ joint venture was successfully built and trial-produced in the “Megalith” industrial park in Belarus, creating the fastest construction speed in the region The large-scale mining engine developed in cooperation with Belarusian Bellas Group has been equipped with 90 tons of ore cards, breaking the technology monopoly of Europe and the United States; The WEICHAI Myanmar Technology Export Project was successfully delivered and had mass production capacity, and the Ethiopian project began mass production.
Weichai high-end power overseas exports also achieved significant growth. Its Fengtai passenger car volume matching Weichai Euro VI has entered the United Kingdom, Singapore, and other high-end markets. Weichai Power became the first Chinese company to receive Euro VI (D) certification in October, paving the way for Weichai to enter the international market. Weichai Bo Du’an engine also successfully entered the American market in 2016, and with excellent performance, lower fuel consumption, stronger power than similar engines in Europe and the United States, won the customer’s favor, sales growth year after year. In the first half of this year, Beaudoin 16M33 products successfully implemented in South Korea and other markets of the batch support. Power Station project also went abroad, and the international giants on the same stage.
The bumper harvest of 2018 was mainly due to Weichai Power’s deep accumulation of overseas markets. From direct trade of products to local manufacture and overseas joint venture, Weichai has formed its unique mode of “going to overseas” in recent decades.
Product Trade: The evolution and maturity of the most traditional “going to overseas” mode
Weichai Power’s first exports date back to 1952. In the 1980s, with the reform and opening up of the country, Weichai Power’s exports also entered a new stage of development. In particular, in the late 1980s and early 1990s, Tan Xuguang, a member of the Weichai Power family, began to work in foreign trade. The young man, who always carried a sense of adventure, immediately caught the “open” signal released by the country and began to open his hands and feet to the international market and surf boldly. “I’ve been to the wildest islands, drilled into the deepest holds, and done all the dirty work. “. Under his leadership, Weichai’s total exports rose from 300,000 yuan in the 1980s to 60 million US dollars in 1996.
Aram, a Bangladeshi dealer who lived through that period, is grateful that Weichai persuaded him to make a bold market shift. In 1994, he accepted Weichai Power’s “sensible” proposal to switch from trading in Weichai to specializing in Weichai products, and from selling single-cylinder engines exported from the name of a river to selling medium-speed engines produced by name of a river That got him where he is today. By 2018, the medium-speed machine carrier he sold had a solid 84 percent market share in Bangladesh, making it the number one ship in the country. “This is the best business year of my life, ” he said proudly, “showing off”, immediately won a burst of warm applause.
With Weichai’s step out of the country faster and farther, Weichai’s product trade pattern is also evolving and maturing. Today, Weichai Power has established its presence in five regions — The Commonwealth of the Independent States, south-east Asia, South Asia, North, and South America, and Europe, the Middle East and Africa — and has successfully sold its products to 110 countries and regions.
Southeast Asia is the traditional old market of Weichai and is also the market that Tan Xuguang took the lead in that year. Although the market is dominated by developing countries, it has maintained the sales performance of the first market share for many years. With the broadening of Weichai’s business scope, the market has changed its strategy in time, fighting the market with diversified products and cooperating with each other. On the basis of the traditional market of a fine ship and electric power, the matching market of locomotive and engine has been continuously developed. Through the acquisition of Vietnam’s largest OEM factory Changhai Company, one step into the local perennial European and American brands occupied by the locomotive market, each year can capture more than 3000 sets of large orders.
Taking advantage of the group’s resources and forming product synergy is one of the key factors for EMEA to achieve significant growth in its market performance. The reason Weichai Power is expected to double its electricity generating capacity locally in 2018 is that it is shifting away from the traditional “all-in-one” model and focusing on the high-end brand of Fine Beaudoin Achieve full coverage of the brand in the local full power range from 15 kW to 1500 kW. The concentration of superior forces, make a fine, so that the product Bo Duan firmly rooted in the local, everywhere to bloom.
Weichai adopts the mode of a local sales team to conquer the local market and Chinese sales staff to support the whole process. Weichai successfully opens the “fast channel” of product sales from the factory to the terminal. Adhere to brand-led, quality first, create high-end market, refuse to reduce prices sales; strengthen market segments, do a good service network, join hands with the most powerful local partners, create differentiated sales advantage; focus on key markets, key customers, train strategic partners, broaden their horizons, compete with international brands, take the opportunity to improve their starting point… Weichai Power in the overseas trade market game, more and more adept, more and more comfortable.
Overseas M & A: The exploration and breakthrough of the new “going to overseas” mode
Overseas M & A is the most difficult and challenging of Weichai Power’s four “go-to-sea” models.
In many cross-border M & A, “seven laws” become an insurmountable barrier: 70% of M & A fail to achieve expected commercial value, and 70% of them fail to integrate after M & A. And WEICHAI’S SERIES OF OVERSEAS M & A all successful, the secret lies in Strategic Synergy and cultural integration.
Weichai Power’s overseas acquisitions began in 2009. Against the backdrop of Europe’s financial crisis, Weichai Power “bucked the trend” by taking down the century-old French company, Beaudoin, for $2.99 M. Weichai Power’s interest in Beaudoin was not only to test the upcoming internationalization strategy with “minimum tuition fees”, but also to fill the gap in Weichai Power’s 16-liter-plus power range. This merger, not only let Weichai into the European market to establish a “bridgehead” but also let their product chain to be further extended and expanded.
Whether it can be consistent with the enterprise development strategy is the primary factor to be considered in the overseas M & A of Weichai series.
The acquisition of Linde hydraulic is due to Weichai in the field of construction machinery has its own engine, but the lack of hydraulic components. Through the acquisition, Weichai integrated “Weichai Power engine + Linde Hydraulic” to create the world’s first hydraulic power assembly, driving the Chinese agricultural machinery, construction machinery market to a “gorgeous” high-end upgrade.
The strategic reorganization of Germany Kaion is due to the fact that Weichai already has products for the market of commercial vehicles and construction machinery in the point-to-point peripheral road logistics chain, but only lacks the handling equipment for use inside the warehouse, while Germany Kaion Group, is the second largest forklift manufacturer in the world. The combination of both sides just can form a complete logistics transportation system.
The acquisition of PSI was also based on strategic synergy. PSI’s gas engines dominate the U. S. market, but they don’t make engines themselves. Weichai Power, on the other hand, has a full range of engines. The two sides of the cooperation found a meeting point. Similarly, together with Ballard of Canada, the British company Sirris, Weichai is aimed at the potential of a huge new energy market.
Weichai Power knows exactly what it wants every time it goes overseas, focusing on its main business, building on its weaknesses and improving its performance. That’s the main reason why every shot in Weichai Power never misses.
In contrast to the difficulties of the M & A process, the integration of the group with the new business is extremely difficult. For most of the European and American enterprises, although they have encountered many problems in the process of operation, it is saturated with the European and American enterprises good genes. How Chinese enterprises can achieve win-win through management and integration is a major test of M & A.
Before each acquisition, Weichai Power ponders the question: Why should we do well when foreigners don’t do well? What can we bring him? What will it take for him to grow? What can he bring to Weichai Power after the merger? Only after sorting out these problems, Weichai will start again.
Respect is the foundation of integration. Each acquisition of an enterprise, Weichai will take major strategic issues firmly control, day-to-day work full “decentralization” to give full respect and trust to local management.
Cultural Integration is the best and most convenient channel to break through the barriers between the two sides. Weichai Power knows that cultural integration is not about using one culture to obliterate another, but about learning from each other. Linde hydraulic is a German native enterprise, which was originally a production workshop of German Kairon Group. After being acquired by Weichai, it faced the problem of transforming from workshop to independent company. Sun Shaojun, the executive director of Weichai power, which is in charge of the hydraulic business, did a market research before taking up the post in Germany, and mastered the excellent quality and technology of Linde Products However, there are high costs, slow feedback to the user information, delivery time is too long, the lack of after-sales service system and other first-hand information. These “weak points” are precisely the “advantages” of Weichai people. Find the right cut into the “life door”, Sun Shaojun arrived in Germany, the first thing is to Weichai “customer satisfaction is our purpose” cultural slogan posted to the office, and to the German staff to explain its meaning in detail. Subsequently, the establishment of a cost-cutting group, the timely delivery rate group, restructuring the sales force, “three strokes” down, Lynd’s overall development face was soon significantly improved.
It is well known that most of the trade unions in the European and American countries are relatively strong. Weichai Power’s strategy is respect + communication. Agree through communication on major issues and step back to reach consensus on minor issues. They invited union members to China to let them know on the spot what kind of enterprise Weichai is. When these trade union members witnessed the development of Weichai scale, development strength, are convinced that the follow-up work will be very smooth.
After the acquisition of Beaudoin of France, Chinese management once fired a passive vice president of the company. At first, they worried that the local union would oppose it, but they were strongly supported by the other side. The actions of the executive are seen by both the Union and the employees, and the people who influence and hinder the development of the company are not welcome anywhere.
Jaquez is a 40 year veteran of Beaudoin, France, in charge of finished quality inspection work. Now in his late 60s, he has always maintained a meticulous attitude toward quality improvement, and his Chinese colleagues recorded his usual work posture — “crouching, kneeling, planking. “. In the Lens, his look in the eyes reveals the concentration, the obstinacy, lets the human, not from awe.
Behind integration is learning from each other. Every year, Weichai POWER SENDS TEAMS OF R & D, process and design staff to learn about the best management concepts, cutting-edge technology, a progressive attitude, and rigorous work processes. Will also invite other employees to Weichai, Weichai excellent corporate culture, team atmosphere. Through continuous learning and exchange, Weichai gradually cultivates and reserve a group of talents with international quality. Recently, they are going to send a group of workshop directors to Germany to study and work.
More than 2,000 years ago, Chinese traders took to the world from Chang’an the beginning of the ancient Silk Road. Today, Weichai is here, gathering friends from all over the world to discuss the future of win-win cooperation. Standing at the meeting point of Eastern and Western civilizations, I believe that the globalization of Weichai Power will also go far and steadily!