Cummins' New Deal in China From "Important" to "Much More Important"

For Cao Side, who has just taken over his new position, Cummins has just started a new departure in China.

When Mr. Cao Side, vice president of Cummins Group, took over Cummins’ business in China, Beijing was experiencing a severe snowfall in 55 years.

"With Ruifeng Megan, I believe that Cummins' business in China will also be better in the new year.

"The snow did not affect Mr. Cao's emotions. He has been dealing with the Chinese engine market for more than 20 years and he is welcoming new challenges in China.

At the end of 2009, in order to further speed up Cummins's fastest growing market, China’s decision-making speed, Cao Side officially took over his new position, directly in charge of China and Russia’s business, and managed Cummins' strategic planning in this most promising emerging market. Business development and joint venture cooperation.

New team old face

"The Chinese market is very important to Cummins." This sentence has become the most talked about Mr. Cao Side in the media. In order to better develop the Chinese market, Cummins has formed a new Chinese leadership team. Although it is a new team, it is an old face. “Cooperating with the class” with Cao Side is the two right-armed people who have been assisting him in the development of Cummins’ business in China over the past ten years: Incumbent Cummins (China) Investment Co., Ltd. Deputy Chairman and Wang Hongjie, General Manager of Cummins East Asia Engine Division. And Liu Xiaoxing, Cummins China Vice Chairman and Executive Director of Cummins China Strategic Development and Joint Ventures.

In 1994, Wang Hongjie joined Cummins as the first batch of senior management personnel employed by Cummins Inc. in China. In the following 15 years, Wang Hongjie fully participated in Cummins' business development and strategic planning in China. As the helm of Cummins' largest business in China, Wang Hongjie has made outstanding contributions to the strategic planning and market development of Cummins in the fields of automobiles, construction machinery, ships, railways, mines and oil and gas fields.

Liu Xiaoxing joined Cummins in 1996 and served as a legal advisor to Cummins China. Since 2000, he has served as deputy general manager and general manager of Dongfeng Cummins. In August 2009, Liu Xiaoxing was officially promoted to vice chairman and executive director of strategic planning and joint venture cooperation of Cummins (China) Investment Co., Ltd.

Integrated layout for full production

“We are partners in the Chinese engine industry” and this statement undoubtedly becomes Cummins’s most appropriate footnote for China’s strategic adjustment. In order to further promote the sustainable development of Cummins in this key market in China, in this strategic adjustment, Cummins will continue to optimize its strategic layout and concentrate on making breakthroughs in key areas.

After nearly two decades of development, Cummins’ investment in China has been basically completed, and China has introduced its entire product line into China. Cummins has established a joint venture with four outstanding Chinese companies for the construction of four engine manufacturing companies. From light to medium-sized and heavy-duty engine product lines, they have all settled in China.

“We have produced engines of 2.8L to 50L in China. This is our pride.” Mr. Cao Side is full of confidence. In addition to the engine products, the key subsystems of the Cummins engine have all been locally produced in China. In addition to the Cummins turbocharged technology system and the Cummins Filtration System, which have taken root in China for more than a decade, Cummins Fuel Systems and Cummins Emissions Processing Systems have also successively established Chinese production bases in 2008. As China implements increasingly stringent emission regulations, key component suppliers such as Cummins emission treatment systems will play a vital role in helping engine products reach emission escalation.

In November 2009, Cummins Power also made further efforts. The new modern power system production base officially opened in Wuhan. The factory has an annual production capacity of 7,300 units, 20,000 unit engines and 15,000 ATS equipment. It is currently one of the largest domestic diesel generator production bases. In addition to supplying the domestic market, all kinds of high-quality products are also exported to overseas markets. Together with the Cummins alternator production base in Wuxi, the Cummins power product chain has been completed. At this point, Cummins has completed the construction of its production capacity in China from key components, to complete engines, to power systems and other full-line products.

Tailored for China

In addition to building first-rate manufacturing capabilities, Cummins has also been promoting local R&D efforts in China. Cummins was the first foreign-funded diesel engine company to establish an R&D center in China. The East Asia Research and Development Center in Wuhan was established by Cummins in cooperation with Dongfeng Motor Corporation.

“We are developing tailor-made products for the Chinese market. We used to do R&D in North America before re-exporting. Now we put our first place in China, and design first meets Chinese customers before we consider other things. The place". Mr. Cao's words were also confirmed in Cummins's China market strategy. The Beijing Futian Cummins Engine Co., Ltd., which is jointly invested by Cummins and Beiqi Foton, will become the largest light engine production base in Asia and will produce the new Cummins light engine product ISF. This light diesel power is a brand-new product built by Cummins global research and development. It is put into production in China for the first time, and it supplies domestic and international market demand. Since this product was put into production in June 2009, it has become the preferred power for many OEMs. According to the plan, Foton Cummins can produce 400,000 units per year.

In the heavy-duty engine market, the 13L engine developed in cooperation with Dongfeng Cummins has also placed the first market in China. The first customer is the Dongfeng commercial vehicle. “Cummins will adjust its positioning in the Chinese market in an orderly manner and extend from the high end to the mainstream market.” Mr. Cao Side’s demand for the Chinese market has not only occupied the high-end market. “Cummins will adopt a more flexible business model in its operations to better adapt to the needs of the Chinese market and its customers. Globally consistent at the strategic level, and adopting a more flexible operation approach based on local conditions at the operational level, In terms of development, we are close to the market and meet the needs of our customers, and we will intensify efforts to develop high-quality products suitable for the needs of the Chinese market and customers.”

Strengthen cooperation and adhere to environmental protection

“In China, our partners are very important. Cummins wants to further strengthen its collaboration with partners and support their success. We are looking for the most valuable and successful partners, so that 1+1>2.” Mr. Cao Side Said that Cummins will continue to fully support the export strategy of Chinese OEMs. With Cummins' leading environmental protection technology, it helps Chinese customers to break the environmental barriers in the international market, and to support the development of Chinese OEM products in overseas markets with a global after-sales service system.

“At the same time, Cummins will continue to fully support the technological innovation pace of its Chinese partners. Combining over 90 years of Cummins innovation experience and technology accumulation, it will help China's partners to innovate and develop. In addition to partners, Cummins products must meet environmental protection requirements. It is also necessary to save energy and reduce emissions, and continue to develop new products and technologies that achieve energy-saving and emission-reduction goals."

As a global leader in natural gas engines, Cummins is one of the first companies to promote natural gas engines in China. This clean power product has been widely used in bus transportation and other fields. Cummins started research on hybrid power technology as early as the mid-1990s. After more than a decade of research and development, Cummins has become the largest manufacturer of hybrid diesel engines in the world. The supporting equipment covers buses, medium and heavy trucks, and light delivery. Areas such as cars, pick-up trucks and ships. Cummins is also the first diesel engine company to apply hybrid technology in China. Higher environmental requirements are new market opportunities for Cummins. “Our remanufacturing technology is to support environmental protection policies.” Mr. Cao Side is very pleased that this technology can be applied in China.

Cummins remanufacturing technology has 20 years of application experience in the field of mining engines in China. Dongfeng Cummins is one of the first batch of remanufactured industrial bases that have obtained state permits. It is forming a large-scale remanufactured circular economy industrial chain. The first phase will form an annual production capacity of 10,000 remanufactured engines. Remanufactured technology that uses old parts for refurbishment is worth promoting in both economic and environmental aspects.

"In China, Cummins's strategy is more important, and China's market is growing." In Mr. Cao's discourse, China's market position has been upgraded from very important to more important.

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