FAW Xichai Qian Hengrong: years of sharpening swords, only for today's "breaking ice"

The Chinese auto industry in 2015 did not usher in the spring of hope. In the first half of the year, the dust settled in the market, and the winter was not complete, adding another layer of chill. For the FAW Jiefang Company Wuxi Diesel Engine Factory (hereinafter referred to as Xichai), the industry's cold air does not seem to invade its muscles. Judging from the market performance in the first half of 2015, Xichai should have already worked hard in the cold.

Just as seven years ago, judging from the US financial crisis affecting Chinese companies, Xi Diesel's director Qian Hengrong has a clear understanding of the Chinese auto market under the new normal economic situation. In the first half of 2015, the sales volume of heavy trucks was fixed at 390,000. “The market for medium- and heavy-duty trucks has slid, and for the first time in many years, it has fallen by more than 30% for the first time.” Qian Hengrong is clearly aware of the grim situation in the market highlighted by these figures. However, Xichai has reserved its energy for many years, and is just beginning to open the “ice-breaking journey” in 2015.

Silently practicing "cold winter"

In the context of poor market conditions, what is Xichai doing? Qian Hengrong said in an interview with a reporter from China Truck Network that under the conditions of micro-growth in the market, Xichai will take sustainable development as its main strategic goal. This is a wise move. Then, how can Xichai, as a national brand, achieve this strategic plan? Qian Hengrong elaborated on four aspects.

Director of Xichai Qian Hengrong
Director of Xichai Qian Hengrong

The first is to adjust the product structure. In the new market environment, the country’s requirements for green environmental protection are becoming increasingly stringent, and it is imperative that vehicle emissions be upgraded. Xichai actively responds to the requirements of the country, speeds up product development and reserves, continues to introduce high-tech and high-quality products, and shows excellent competitiveness in a highly competitive market. Seizing the opportunity to launch new products such as Liberation J6 pilot version and JH6 world-class heavy truck, Xichai will continue to expand its market influence. At the same time, Xichai also through the docking of the product design process, enhance the matching performance of the engine and the vehicle, and further enhance the product's competitive advantage. In the first half of this year, Aowei 11L engine maintained its leading position in the same displacement with 45.5% market share. Sales volume of 4x6DLD model of Xichai Hengwei increased by 259% year-on-year. The product's competitive advantage and profitability were further enhanced, resulting in operational quality and operation. Efficiency improves synchronously.

The second is to adjust the market layout. In the face of challenges, Xichai took the initiative and seized the initiative to adjust and optimize the market layout in accordance with changes in user needs. On the basis of focusing on the automotive market, Xichai has begun to lay out non-road markets three years ago. Taking advantage of the combination of technology and services, Xichai aimed at potential markets such as harvesters, tractors, small loaders and power units to cultivate new market growth points and obtained batch orders in succession. Sales volume for the first six months increased 8.4% year-on-year. New breakthroughs have been made in the sales of forklifts, small loaders, medium and large tractors, medium-sized blue storage machines, and stationary units. At the same time, Xichai further optimized the market response process, improved the level of marketing services, and thus increased the order success rate.

The third is the construction of a talent team. Qian Hengrong stated that although many companies are currently streamlining personnel, Xichai has also reduced the number of personnel recruited in recent years. However, it has paid more attention to the construction of the talent team. At present, it still maintains 60-70 key universities annually. Recruitment of graduates, continuous recruitment of talent pool, complete the construction of talents.

The fourth is quality cost control. All the company's efforts are for the ultimate benefit. Under the severe market situation, Xichai focused on the construction effectiveness mechanism, aiming to cope with the decline of the “total amount” and the overall economic efficiency remained stable. According to Qian Hengrong, through the establishment and implementation of the quality traceability system, Xichai’s “Three Guarantees” loss has declined year by year. At the same time, Xichai is currently participating in the “National Quality Award” selection campaign, and it is sure to win this award for its outstanding product quality and excellent management system.

Independent Innovation Meets New Normality

"Internet +" is becoming a new outlet. Promoting the combination of mobile Internet, cloud computing, big data, logistics networks, and modern manufacturing is a new idea for national top-level design. Qian Hengrong believes that the development of “Internet Plus” is a big trend, and the Internet is also a tool. If China’s manufacturing industry can effectively use this “tool” to enhance itself, the future will inevitably win big breakthroughs.

Xichai chose to follow suit. “Innovation is one of the core motives for the continuous development of Xichai. Innovation is not a simple matter, and we need to do a lot of trials and efforts.” Qian Hengrong emphasized that Xichai’s attempts in intelligence have never stopped. And intelligence is based on the "intellectual fusion" of information technology industrialization. Xichai conducted informatization exploration and application from product development to product manufacturing, service, and management. Only with a good information base can we better promote intelligence. For Xichai, its application to intelligence is reflected in many aspects. One of the application cases is the intelligent logistics in the factory, such as automatic identification and automatic transmission. Qian Hengrong believes that all intelligent applications are based on the intelligent analysis of demand. First of all, to understand the needs of customers, we provide solutions for sales, after-sales service, and vehicle products by conducting big data analysis on customers.

FAW Jiefang Company Wuxi Diesel Engine Factory
FAW Jiefang Company Wuxi Diesel Engine Factory

Qian Hengrong judged that under the current new normal, the sales of heavy trucks in mid-2015 will fluctuate between 800,000 and 900,000. The high-end light trucks in the light-duty truck market will develop rapidly and the product competition will become fiercer. Under such circumstances, Xichai has improved its product competitiveness through continuous innovation. At present, the Aowei products matching the Liberation J6 pilot version have reached a long oil change cycle of 100,000 kilometers. Increased power means that transportation efficiency is further improved. In addition, the Xichai FCB braking system achieves shortened braking distances through reverse power and improves vehicle safety performance. At the same time, a new generation of 13L engine products independently researched and developed by Xichai will be available in the near future, which will help upgrade the truck's power.

“Technological innovation is the foundation of all innovation. With technological innovation, we can have management innovation, business model innovation, etc. Innovation is not a matter of slogan. In 2014, Xichai launched five mechanisms to encourage innovation to promote the company’s own Innovation and development, and hope that through this initiative to truly create a cultural atmosphere to encourage innovation." Qian Hengrong said.

As a passionate independent brand enterprise, Xichai is one of the forces that realizes China manufacturing 2025. Director Qian Hengrong expressed his opinion: “The development of independent brand enterprises in China still needs step by step. Some so-called 'curve passing' is not desirable. We still need to seriously study the most basic things.” At present, Xichai is formulating the “Thirteenth Five-Year Plan”, of which intelligence is one of its focuses. How to achieve its plans and goals for the future, Qian Hengrong believes that on the one hand, the foundation is the basic condition for development, on the other hand, talent and innovation.

Regarding the direction of future development, Director Qian Hengrong elaborated his ideas for the China Trucker reporter in four sentences: “digest excess capacity”, “enhance operating quality”, “upgrade system capability” and “build high-end brand”. The clear and powerful expression outlines the development direction of Xichai in the new market environment. The clarion call to strengthen the national enterprise and make the national brand sounded. Xichai is struggling with a solid attitude, a steady pace, and the spirit of innovation, and is heading for the dream of “becoming a BMW of the engine industry”. .

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