Foreign investment in light of the advantages of the engine to share China's light truck bonus

A few days ago, Jiang Caihuai, deputy general manager of Jianghuai Automobile, said in an interview with reporters that the power system of JAC light trucks is more abundant and complete than in the past. The power section covers 2.8L~4.8L, and can be equipped with 4DA1, Cummins, and Maisford three brands of engines. Jia Wosi, general manager of Jianghuai Navistar Diesel Engine Co., Ltd., also confirmed to the reporter that the joint venture will provide engines for the JAC light trucks with 3.2L and 4.8L engines.

It is understood that the joint venture agreement signed by JAC and Navistar states that when the products manufactured by the JAC-Navistar Diesel Engine Company have a competitive relationship with similar engines in terms of quality and cost, the JAC Commercial Vehicles will give preference to the joint ventures. product. This article actually found Navistar a stable sales support point in China. As an example of a joint venture light vehicle company such as Nanjing Iveco and Sichuan Nanjun, it is obvious that foreign investors can use the advantages of the engine to share the dividends of the rapid development of China's light truck market.

The engine

The JAC light truck had its own engine in the 1980s, but it was a drag on the engine factory because of its high cost. After Zuo Yanan was in charge of JAC, he resolutely gave up his own production engine project and turned to an externally purchased engine to meet the power demand of the vehicle. History proves the correctness of Zuo Yan'an. From then on, JAC has entered the fast track of rapid development. In 1996, China's first fashionable, high-grade light-duty HFC1061 went offline; in 1999, Anhui Jianghuai Automobile Co., Ltd. was established; in 2001, “Jiangjiang Auto” was listed on the Shanghai Stock Exchange; in 2004, passenger car gasoline The engine started mass production. At this time, when the commercial vehicle diesel engine was launched, the time went by.

In fact, until 2005, the supply of power systems for JAC light trucks has always been very secure. There are many suppliers of powertrains for JAC light trucks, among which the most active is Dongfeng Chaochao. There are rumors in the industry that Dongfeng Chaochai’s enthusiasm for supplying powertrains for JAC light trucks is higher than that for light truck companies in the Dongfeng automobile system, because JAC pays the full amount and is timely. However, by 2005, on the one hand, the timing of production of light-duty truck engines by JAC had matured. On the other hand, its rival, Foton, led JAC to a large number of its own engines, which prompted JAC to set its own engine project.

In 2006, the JAC light diesel engine began mass production, reversing the situation in which the JAC commercial vehicle's light engine was completely dependent on outsourcing. In 2008, the high-end light truck Shuai Ling II carrying the 4DA1 engine produced by Jianghuai Corporation was awarded the "China Truck Model of the Year" light truck award; in 2009, the JAC light truck equipped with its own engine won the "Logistics Technology Equipment" most welcomed by the top 100 Chinese logistics companies in 2009. "title. Although Jianghuai Light Truck Co., Ltd. has achieved certain achievements in its self-produced engine, the low power segment is still its weakness. JAC's high-end light truck "Shuai Ling" was once classified as a "quasi-high-end light truck" due to its low engine power. In this regard, Jianghuai is on the back, coupled with the consideration of heavy-duty truck engines, Jianghuai began to seek joint ventures with Navistar.

Foreign wishful thinking

Compared with passenger cars, China’s light truck companies are relatively strong. Foreign investors want to share the dividends of the Chinese market. It is difficult to force Chinese companies to abandon their brands or give up too much autonomy in the vehicle industry. Therefore, it is a better choice to use the engine to divide the dividends of the Chinese market.

Joeworth said that Jianghuai Navistar 3.2L and 4.8L two high-power engines have already completed local production preparations and are expected to be put into market in October; 9.3L and 13L are two original Navistar engines. It is also the product introduced by the second phase of Jianghuai Navistar Company. According to Joeworth, the reason why the product was introduced in two stages was to consider the coordination with the entire vehicle joint venture project. The first phase of JAC Navistar's mission was to upgrade the JAC light truck including Shuai Ling. Dynamic, after the approval of the entire vehicle joint venture project, the introduction of two heavy-duty diesel engines of 9.3L and 13L matched the joint venture vehicle. Judging from the current situation, Navistar obtained a lot from the joint venture.

According to Joe Worth, Navistar Corporation is optimistic about the global network of JAC commercial vehicles and hopes to use JAC's dealer network in Algeria, the Middle East and South America to sell Navistar’s entire vehicle products in the future. More importantly, the joint venture agreement reached between JAC and Navistar is also very favorable to the foreign side. The joint venture agreement stipulates that when the engines produced by the JAC Navistar Diesel Engine Company compete with similar products in terms of product, quality, and cost, the JAC Commercial Vehicles will use the products of the joint venture company preferentially. This article actually found that Navistar has a stable sales support point in China and it also helps to suppress local engine manufacturers.

Generally speaking, the profit rate of the engine is much higher than that of the entire vehicle. Therefore, under the background that China's light trucks have become a climate, foreign investors pay particular attention to dividing the dividends of the Chinese market with the advantage of the engine. In addition to Jianghuai, Sichuan Modern, Qingling, Nanjing Iveco are all the same. Qingling's engine comes from Japan's Isuzu. The Hyundai engine is supplied by Hyundai Motors and the Nanjing Iveco engine is supplied by Iveco.

The future is difficult to reverse

Overall, the joint venture in the engine area has so far benefited both parties. For example, JAC has increased its product competitiveness through a joint venture with Navistar. Jianghuai Shuai Ling, Jianghuai Bell and other light truck products can obtain dynamic support for better power, economy and reliability, thus consolidating its dominant position in the domestic light truck market. The engine of the JAC heavy truck is a blank. Through the joint venture, it will receive the support of 9.3L and 13L engines, which will improve the product quality of the JAC Gehlfa truck and increase its competitiveness.

However, in the long run, the game between the Chinese and foreign sides is inevitable. Foreign-invested companies may use the engine as a breakthrough to attempt to enter the vehicle sector, making the local light-card brands become subordinate to passenger cars, while the Chinese are trying to grasp the engine core technology. This battle without gun smoke has only just begun.