Going forward, dancing around the world, Weichai walked in the forefront of the industry. From overseas mergers and acquisitions of well-known international companies to implement resource integration, to the synchronization of the national "One Belt and One Road" strategy to develop international capacity cooperation, Weichai has made steady progress on the road to internationalization.
Weichai factory
Unswervingly taking the road of internationalization, Weichai’s international brand image is becoming clearer and brighter, and its international influence is growing. Today's Weichai has become one of the highest-level internationally-strategic Chinese equipment manufacturing gold brands in strategic business operations. Weichai's banner flutters high in the international market.
Grasping overseas opportunities to implement overseas mergers and acquisitions
Enterprises must become stronger and stronger, and internationalization is the only way. Weichai actively responded to the country's "going out" strategy and adopted the three strategies of "leading export trade, speeding up cross-border mergers and acquisitions, and local manufacturing" to create an open and win-win internationalized group and clamored for Chinese manufacturing brands globally.
In the process of rapid development, Weichai people realized that to become a global brand, it is not enough to rely on a single product to sell products one at a time. It actively uses global resources to synergize domestic and foreign advantageous resources to create internationalization and diversification. The innovative and open group is the inevitable choice for Weichai to build an international company and build an international brand.
The global financial crisis that broke out at the end of 2008 made Weichai keenly aware of the opportunity for cross-border cross-border mergers and acquisitions. On January 23, 2009, Weichai Power acquired France’s Boduuan Engine Company for 2.99 million euros and successfully took the first step in overseas acquisitions.
As the spread of the international financial crisis has intensified, the dialectical analysis of Weichai's dangers and opportunities is also becoming more and more profound. On June 22nd, 2009, Weichai held an internationalization work conference. The chairman of the group, Tan Xuguang, clearly stated that the internationalization of the company will not be successful any time. The global financial crisis is an important strategic opportunity for Weichai. This meeting framed the measures and goals of Weichai's internationalization, and proposed to speed up the process of overseas mergers and acquisitions and build an international platform.
Weichai cooperates with luxury yacht manufacturer Faraday Group
In 2012, Weichai ushered in an international "bread harvest year." In January of this year, Weichai had a strategic cooperation with Italy's Ferretti Group, the world’s top luxury yacht manufacturer. In September, Weichai Power also signed a strategic cooperation agreement with the world's leading industrial forklift manufacturer and the global leader of hydraulic technology, the German KION Group, to acquire Linde Hydraulics and invest in the KION Group. In December, Weichai Power completed the transaction with the KION Group and the biggest direct investment dust in the German company was settled.
After completing the strategic cooperation with the top European companies, in June 2016, the KION Group, a subsidiary of Weichai Power, acquired a wholly-owned subsidiary of the world's third-largest supplier of automated logistics solutions, the Dematic Company in the United States. The way of marriage quickly entered the top of the global logistics market. At this point, Weichai achieved the industrial layout in the United States and the strategic layout of globalization was initially completed.
Do it best. Looking at every overseas merger and reorganization of Weichai, both are targeting the world's most cutting-edge and cutting-edge companies. These mergers and acquisitions companies have leading core technologies, especially Linde Hydraulics, which completely changed the pattern of China's high-end hydraulic core technology being monopolized by foreign countries for a long time, and promoted China's equipment manufacturing industry to the high end of the value chain. At the same time, these growing businesses are also conducive to Weichai's industrial restructuring and improvement. As a high-end consumer goods, yachts have broad market prospects in the world, especially in emerging countries. Forklifts, as a post-cycle product, are closely related to logistics development and maintain stable growth and profitability.
Weichai M&A and restructuring
In-depth global market, the convergence of global wisdom, overseas mergers and acquisitions made Weichai acquire cutting-edge technology in the global industry, promote China's industrial brands to the cutting-edge of the world, and achieved product internationalization, brand globalization, and industrial diversification.
Synchronous national "One Belt and One Road" strategy to create a Chinese brand of gold
On September 29 this year, under the witness of the two heads of state, Tan Xuguang and Belarusian Minister of Industry Wolff signed a memorandum. The two sides will set up a joint venture company to produce diesel engines in the Belarusian Zhongbai Industrial Park. The total investment is 50 million U.S. dollars. The annual production capacity will reach 20,000 units. This is a landmark project on the “Belt and Road†initiative. It also marks another solid step forward for Weichai’s strategy to “walk into overseas operationsâ€.
Deepening the international market, the "One Belt and One Road" strategic opportunity provides a broad arena. Synchronizing the national strategy, Weichai quickly acted to innovate business models, and through overseas investment and construction of factories, technical exports, direct trade and other internationalization initiatives, expanded international capacity cooperation and established a successful model of “Made in China†going global.
Shandong Heavy Industries India Plant is a “test plot†where Weichai builds a good harvest overseas. By adopting a mode of asset-light operation, Weichai transferred the entire domestic production line to an Indian factory. With minimal investment and minimal risk, Weichai embarked on the fast track of rapid development in just two years. Since the Indian plant was officially put into operation in November 2014, it has been prosperously produced and sold. At present, there are more than 2,000 Weichai engines supporting ships in India. In March 2016, the ship produced by the Indian factory was successfully exported to Bangladesh, achieving a zero breakthrough in the foreign-made engine export of Weichai in India.
Weichai overseas factory
Drawing on the experience of building factories in India, in 2013, Weichai signed a technology export agreement with Myanmar, becoming the first technology license export project of Weichai. The Myanmar project not only drives the Weichai engine parts, powertrain and vehicle products into the Myanmar market, but also enhances the local market competitiveness and brand reputation of Weichai products. At the same time, in Ethiopia, another license production project of Weichai and the local government has also started production.
Deeply pursuing the “Belt and Road†approach, Weichai is using technology not only for the market, but more importantly for shaping the Chinese-made gold brand and winning the full recognition of China's manufacturing by countries along the route.
In 2014, Weichai entered the important strategic fulcrum of the Silk Road - Pakistan. At the time, the Pakistani shipbuilding market was flooded with engines made by European, American and Japanese brands as well as various Chinese small workshops. Chinese manufacturing was tagged here with low prices.
In the face of questioning, Weichai spoke in terms of quality and gave it a perfect blow. Compared with another fishing boat equipped with a Japanese brand engine, Weichai's engine saves 20% of fuel in the sea test, and it can save US$1,500 in diesel fuel in one trip to the sea. . Weichai Engine has thus established a very high image and reputation in Pakistan, rewriting the image of “Made in China†with poor quality. At the 2014 Pakistan Energy Show, Pakistan’s Minister of Mines visited the Weichai booth and praised Weichai.
While building a Chinese-made gold brand image and outputting “Weichai manufacturing,†Weichai will also copy its mature and effective quality control model to the project site to ensure that “wealwood quality†is in China as well as countries along the “Belt and Roadâ€. All are equally outstanding, reliable and durable. In Myanmar, due to the weak industrial foundation, workers have not only poor technical capabilities but also weak security awareness. The project team of the factory in Myanmar also exported the Burmese workers with a passionate "Weichai spirit" while making it a rigorous and pragmatic working attitude. It also created the brand reputation of Weichai.
As a pioneer in the national strategy, Weichai has already established a pattern of transfer of technology and products in countries along the “One Belt and One Roadâ€. At present, Weichai engine products have been sold to more than 110 countries and regions on five continents, with an overseas holding of 300,000 units, of which the “Belt and Road†related exports account for more than 90% of total exports.
To adapt to local conditions, to create a world-class enterprise with Chinese characteristics
In technology-advanced countries, capital-for-technology is used, and countries with backward technology use technology to change markets to create international synergies. Weichai has changed from a local state-owned enterprise to a truly multinational enterprise group. Overseas business and domestic business are equally divided.
It is a severe test whether these overseas companies can be run well. Weichai explored the inspirational overseas operation and management model - boldly exporting Chinese-style management and corporate culture, grafting on global resources, adapting to local conditions, and building a world-class enterprise with Chinese characteristics. Therefore, Weichai passed a cross-border M&A reorganization after a big exam.
In the cross-border mergers and acquisitions, there is a "seven-seven" rule, that is, 70% of mergers and acquisitions cases are failures, of which 70% of the crux lies in the integration of different companies after mergers and acquisitions. In this regard, Tan Xuguang frankly stated: “The differences in financial statistics systems, corporate governance structures, and corporate cultures between countries are huge challenges for transnational mergers and acquisitions. For example, the corporate governance structure of the world's second-largest forklift manufacturer, the KION Group, is There are many differences in Weichai, and there are huge differences with listed companies in China."
Weichai Acquires KION Group
In this regard, Weichai believes that there is no single, best model for corporate governance. The key to the integration of overseas companies is to adapt to local conditions and to govern according to law. After the successful listing of KION, the operation is very standardized. Weichai will focus on the selection of good professional managers, good financial control, promotion of strategic consistency and synergy, and fully guarantee the localization of M&A companies. In 2015, KION Group's performance hit another record high and became the most important source of profits outside the engine segment.
While promoting localization operations, Weichai dispatched a number of high-ranking executives to merge into mergers and acquisitions companies to marry Weichai management thoughts and corporate culture with global resources.
Weichai decided to drive mergers and acquisitions through culture. After several years of hard work, we finally established a relatively uniform cultural system on Ferretti's global business platforms. We managed the management characteristics of Weichai's parent company in its governance structure and management system. The inheritance of its own excellent management experience. On this basis, Ferretti carried out deep restructuring and reforms, stepped out of the shadow of the financial crisis, and entered a healthy development track.
It is an important step for Weichai to realize the integration of global resources by promoting the integration of domestic and foreign companies' innovation and coordinated development. Linde Hydraulics, a world-class technology company, focuses on high-end customers in Europe and North America. After its merger and acquisition, Weichai established Linde Hydraulics (China) Co., Ltd. The Sino-German team jointly developed products suitable for the Chinese market, and “China Cost + European Quality†was accelerated. For Baudoin and Weichai, each year has provided tremendous financial help, and it has become an important engine frontier R&D and manufacturing base, filling the gap in the 16L engine of Weichai.
Today, Weichai's overseas companies are making good progress as a whole and become a new growth engine. In 2015, in the context of the sharp decline in the domestic market and the difficulty of common operations among peers, Weichai has obtained the momentum for sustainable development from the global market. Of every 100 yuan of sales revenue, 57 yuan came from overseas markets, while those from overseas companies Profit contribution is higher.
With regard to accurate, stable, and well-integrated, Weichai is a successful example for Chinese companies to “go globalâ€. Weichai has also proved by practice that Chinese companies can completely build world-class enterprises with Chinese characteristics in a global perspective.
“In the next 30 years, we will turn Weichai into a renowned international brand in China's manufacturing industry. We look forward to the birth of a new and internationalized Weichai in our hands.†At the celebration of the 70th anniversary of Weichai, Tan Xu Guang made a vow.
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