Background: In the face of the implementation of the National III Standard, the rising costs of fuel, steel, and other raw materials, China's heavy-duty vehicles are entering a period of full competition under the background of differentiation, combination, and new products. In this situation, the alliance of advantageous resources in the industrial chain seems to have become an important means of competition in the industry and has become an effective way to achieve mutual wins.
Build a strategic alliance between Weichai and Futian to deepen cooperation
On June 28th, Weichai Power, the world's largest auto parts and assembly system giant, and Futian Automobile, the largest manufacturer of commercial vehicles in China, signed a strategic cooperation agreement in Beijing. According to the agreement, Weichai Power will cooperate with Foton Motor in product innovation, resource allocation efficiency, joint market development, and joint market service network construction to achieve a solid strategic partnership. This move will not only enhance the competitiveness of both parties in their respective fields, effectively reduce costs, but also increase the effectiveness of both intangible assets and establish stronger market leadership on the basis of collaborative use of resources.
Seeking the overall situation: Heavy trucks and engine giants build collaborative alliances
In the past six months, the average cost per heavy truck increased by 4,000-5,000 yuan due to the significant increase in the cost of raw materials such as steel. In addition, in the face of the implementation of the National III emission standards, the cost of high-environment standards for heavy-duty vehicles will also increase significantly. Some experts pointed out that China’s heavy-duty auto market has entered an era of full competition, characterized by differentiation, combination, and new products, and its competition is gradually being intensified.
One side is the world's largest supplier of high-power engines. On the other hand, China's largest commercial vehicle manufacturer is on the one hand. Faced with the increase in raw material costs and the shortage of advanced engine technology, what are the origins of the two giants?
The cooperation between Weichai Power and Foton Motor began on April 28 two years ago. Weichai Power and Foton Motor led the joint venture with German BOSCH and Austrian AVL to sign the Strategic Alliance Framework Agreement. The Big Four agreed to Regularly discuss the domestic market trends of heavy trucks, determine their respective market development strategies, and jointly develop and design leading international automotive power products. Under this strategic framework, Weichai Power and Foton Motor are cooperating to design a power system technology research and development center based on the needs of the vehicle, and at the same time integrate their respective R&D institutions and service networks around the world, and carry out marketing, brand communication, and joint procurement. Cooperation to effectively reduce the cost of both parties and establish a stronger competitiveness, jointly registered and possessed the core power brand "Wei Chaiou V Power."
If the last cooperation was described as cooperation in the areas of market, technology, and management information, this cooperation will be a deeper level of corporate strategic cooperation.
In the depth cooperation between Weichai Power and Foton Motor, the latter’s commitment is that in addition to the foreign branded engine products introduced and jointly produced, the Foton Motors will Weichai Power is the only power system strategic partner for domestic brands in the development of new heavy-duty vehicle products. At the same time, Foton Motors is committed not to develop and produce heavy-duty automotive diesel engines and gearbox products that compete with Weichai in the next five years. Moreover, in the next five years, the matching rate of Weichai power engines and gearboxes used in heavy-duty vehicles (14 tons or more in total, the same below) will be no less than the matching rate of Weichai's power in Futian's heavy-duty vehicle products in 2007. It has also been increasing year by year, and at the same time, Foton’s newly developed heavy-duty vehicles will give priority to the use of Weichai’s complementary powertrain products.
The in-depth cooperation between Weichai Power and Foton Motor outlines a strong framework for the joint and coordinated development of China's heavy truck and engine sectors.
Coincide with the concept: the integration of ideas for deeper corporate strategic cooperation
How to force the two giants to unite? Will strong cooperation affect China's heavy truck and engine sectors? Is there any squeezing of competitors?
View related topics: Weichai Power: Expanding Auto Parts Gold Industry Chain
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