Engine balance for heavy truck companies: “Heart” self-built or outsourced


At present, in the domestic heavy truck industry, in addition to key enterprises such as FAW Jiefang, Dongfeng Commercial Vehicles, and China National Heavy Duty Truck, other heavy truck companies such as Futian, Hualing, and Universiade started from the assembly stage and still purchase large quantities. engine. Whether its own “heart” is built or purchased, it does not bear huge R&D costs, but it has to endure the “sufferings” that are subject to human beings, or it is a joint venture or cooperation with others, sharing the technology of the joint venture, sharing the research and development costs, and dividing the benefits Go out. These forms exist in the automobile circle. As for which type of existence is best, I believe that it is the best for the development of the enterprise.

Self-built representative enterprises: China National Heavy Duty Truck, FAW Liberation, and Waring

Advantages: Maximize profit margins: R&D costs and risks alone FAW liberates FAW Xichai and FAW Deutz Dachai; China Sinotruck has its own engine plant, and its upgraded products also solve engine problems through a joint venture with Mann. . These self-built engine veteran OEMs need not worry about their survival. However, new heavy-duty engine brands such as Valin, whether in terms of cost, technology, market, product consistency or brand, cannot compete with old brands such as Weichai and Yuchai, although they are supported by complete vehicles. However, the sales volume is still very small, not only the input-output ratio of the project is far out of balance, but also has a tendency to drag down the profitability of the entire vehicle.

As the core component, the engine plays a key role in the increasingly fierce market competition for heavy truck companies. However, the engine has invested heavily in product technology, talent reserves, and funds. It is unbearable for general enterprises. Heavy-duty truck companies that build heavy-duty engines are faced with a large amount of technology R&D investment in the upgrading process of product countries IV and V, and continue to withstand the market. The cost of cost pressures fell.

On behalf of the joint venture enterprise type: Dongfeng commercial vehicle, JAC, North Ben heavy truck <br> <br> advantages: cost-sharing research and development, risk reduction Disadvantages: lower profits Dongfeng has its own engine plant - Dongfeng Chaoyang Diesel, and Cummins The joint venture company; Jianghuai in addition to the engine outside the acquisition of Weichai, also a joint venture with NC2 an engine company, the engine project has been unveiled, the joint venture company products mainly for JAC to meet China will adopt the European IV, European V standard engine At the same time, it also prepares JAC's light, medium, and heavy trucks for export overseas. In the future, according to market demand, it will also supply customers other than Jianghuai. Last year, Beiben Heavy Duty Truck, which has been outsourcing, also signed a joint venture agreement with Yuchai. With the promotion of the Ordnance Industry Group, it is only a matter of time before Bei Ben realizes a self-made engine.

These joint-venture companies represent Dongfeng Cummins, which is already on the right track. Apart from mainly supplying Dongfeng Motors subsidiary companies, it also supplies engines for Anhui Hualing, Zhengzhou Yutong, Xiamen Jinlong and Liugong Machinery. In addition, these recent joint-venture engine companies, due to the joint venture's own engine technology, will gradually get rid of dependence on external engines. From the perspective of professional engine manufacturers, that is, they will face the risk of reduced demand.

However, from project approval to investment and construction, to production, scale effect, and improvement of related supporting facilities, it usually takes 3 to 5 years to adapt to costs and localization. Therefore, it cannot be seen in the short term. The gross profit margin of heavy truck companies has been significantly improved.

Analysts said that when the engine project generates benefits, it is conservatively estimated to save between 4% and 5% in the engine part of the vehicle. However, in the initial period of construction of the engine, the heavy truck company did not have a cost advantage, even due to the amortization of costs and profits. It will be damaged; after about one year of production, benefits will only appear as sales increase.

Type purchased on behalf of Enterprise: Grand Canal Car, Truck <br> <br> advantages: no development risk and cost pressures disadvantage: lifeline in the hands of others, the lowest gross domestic joint truck in the heavy truck industry is a special existence, However, despite its large number of shareholders, its engine supplier is its shareholder and has interests involved, so it is relatively low risk compared to the Grand Canal Heavy Truck.

The Grand Canal Heavy Truck is a typical representative of pure outsourcing. The object of its outsourcing engine is mainly Weichai. Not long ago, the two sides signed a new strategic cooperation agreement to stabilize the relationship between the two strategic alliances. Vehicle manufacturers do not do the engine, mainly depends on their own sales.

In general, if the cost is less than 50,000, the cost of investing in the engine cannot be recovered, and the company does not have the incentive to expand upstream, unless the production engine can also be sold to other companies. Therefore, for the Grand Canal Heavy Trucks, which have annual sales of only 10,000 units and no technical accumulation, outsourcing of the engine is the most suitable mode for the development of the production chain industry. However, with the expansion of market size, Universiade may be able to select many partners to share the risk of “putting eggs in one basket”. It should focus on gaining a firm foothold in the industry, expanding market share, and solving survival problems. Instead of trying to build an engine plant by itself, investing heavily in R&D expenses.

Mixed behalf of Enterprise: Foton <br> <br> advantages: more cooperation to reduce the risk weaknesses: the lifeblood still could not help himself control Fukuda as typical representatives of hybrid, its cooperation with Weichai, Cummins and Daimler, to Fukuda Established a strong gold engine industry chain. The joint venture and cooperation between Foton Motors, Weichai Power, Cummins, and Daimler should both reduce the transaction costs between them and their respective resources have been allocated more effectively.

In fact, before Jianghuai Ye Hao, Futian Ye Hao, and Weichai's game are very difficult and passive, and OEMs are clearly aware of this, so the layout of their own core power system is more and more urgent. Although in a period of time, due to the strong demand for medium-to-low-end products in the domestic heavy-duty truck market, Weichai still has an absolute advantage in the heavy-duty engine supporting field, but as the emission standards become stricter and the demand for heavy-duty truck products is upgraded, the future The development of Chai in Futian’s diverse supporting system is not yet clear.



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