Industrial Chain Integration Accelerates the Future of Independent Engine Enterprises in China

A few days ago, the reporter learned that since October, Yuchai, China’s largest independent engine company, has stopped production intermittently.

“Establishment of the main industry cluster and the stabilization of the industrial supply chain will undoubtedly be conducive to resisting operational risks. Independent engine companies will inevitably have to worry about the prospect of an integrated industrial chain.” Some analysts believe.

The market as a whole "shrinks"

According to data from the China Association of Automobile Manufacturers, in October, China’s commercial vehicles produced and sold 185,000 and 177,200 vehicles, which was a year-on-year decrease of 3.05% and 9.30%, and the third consecutive month saw a double-year decline in production and sales. Among them, heavy-duty trucks (including non-integrated vehicles) sold 16,238 vehicles a month, a decrease of 32.96% year-on-year.

Due to the close relationship between the sales volume of the engine and the sales volume of the entire vehicle market, due to this, several major diesel engine companies in China, such as Yuchai, Weichai, and Yunnei, have experienced declines in production and sales. Data show that in October 2008, the total sales of diesel engine companies were 132,247 units, a decrease of 17.82% compared with the previous period. Sales of Yuchai, which ranked first in terms of sales, were 29,582 units, a decrease of nearly 25% from the previous quarter. Among the top 10 diesel engine manufacturers, except for Dongfeng Chaoyang Diesel Engine Co., Ltd., which saw a 40% increase, the other 9 companies have experienced different degrees of decline, and the entire engine market has become a serious “shrink”. "Whether the independent or non-independent engine company, the next day is not very good." Professor Ni Jinmin of the Institute of Engine Energy Saving and Emission Control of Tongji University Automobile Institute told the reporter.

OEMs have established engine companies

However, unlike the “shrinking” of the entire market, some OEMs have started to establish their own engine companies and continue to squeeze the survival space of independent engine companies. At the same time, they also hope to control the “heart” of this vehicle in their own hands. . “From the point of view of vehicle manufacturers, vehicle manufacturers do not want their own technology and production capacity to be controlled and tied up by other engine companies.” According to industry insiders.

In April this year, Beijing Foton Cummins Engine Co., Ltd. was officially established. It is understood that this is China's largest engine production enterprise at present, and its annual production capacity will reach 400,000 units after it is completed. However, for Futian, the establishment of the new company also means reducing the supply of engine suppliers and buying the engines of their companies.

At the same time, SAIC acquired Shangchai shares, Hefei Chaoyang Diesel Engine Co., Ltd., Guangzhou Automobile and Hino, and other projects are showing that the phenomenon of self-built engine production lines for truck heavy truck companies is quietly becoming commonplace. This will be a long-term challenge for the diesel engine manufacturers that are independent of the entire vehicle industry.

“From an international point of view, there are fewer and fewer independent diesel engine companies. At present, only the Cummins family are left behind.” Zhang Xingye, honorary chairman of the China Society of Automotive Engineers, said, “And Cummins can survive in China, to a great extent Thanks to their cooperation with Dongfeng, it is equivalent to having an entire vehicle company.Accordingly, Mercedes-Benz, Volvo and other heavy truck manufacturers have their own dedicated engine production plants, neither external supply nor external procurement of engines. ”

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Flexible response is the key

“At this time, some independent engine companies may be more dynamic.” Ni Jimin put forward his own views. He believes that in the downturn of the auto market, some independent engine companies have the flexibility to choose vehicle manufacturers to achieve the "East is not bright," and this time is that some non-independent engine companies face more difficult choices. .

From the perspective of diesel engine companies, diesel companies affiliated with auto manufacturers often have relatively small degrees of freedom in sales. Parent companies control these diesel companies' product sales through written or unwritten practices, so the mother manufacturers are these The important market for diesel engine companies is even the only market. The independent diesel engine company has a lot of autonomy in terms of sales, and can be sold as long as there are market orders.

“So, it's hard to say that the prospects of independent engine companies are worrying. Before the crisis, any company will face greater pressure. At this time, it depends on how flexible the business is.” Ni Jimin told reporters, “If it’s R&D, it’s powerful Enterprises, at this time, can appropriately adjust the product structure in response to changes in the market. For example, seizing the opportunities of new rural development and expanding the engines needed for low-speed trucks may be an opportunity.

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