The commercial vehicle industry experienced the troughs of 2011 and 2012 and the destocking phase. All commercial vehicle companies are accelerating the pace of transformation. This is the case for Weichai. On December 16, Weichai officially released its passenger car brand "Yingzhi", becoming another "new army" in the Chinese passenger car market.
As we all know, Weichai is a commercial vehicle company with outstanding performance in the manufacture of core components such as engines, axles, and transmissions. As early as in 2009, it passed the acquisition of Chongqing Jialing Chuanjiang Motor to deploy the passenger car market.
In fact, the timing for Weichai to enter the passenger vehicle market is not very good. From September to November this year, the sales of self-owned branded passenger vehicles have not increased as fast as the overall growth of passenger vehicles for three consecutive months. In the fastest-growing segment of SUVs, the share of autonomous SUVs in the domestic SUV market was only 41.1%, down 1.7 percentage points year-on-year. Just as the first product of Weichai is the SUV, I do not know what advantage this compact SUV vehicle assembled from a Mitsubishi engine and a GETRAG transmission has compared to the SUV sold on the market.
There has never been a shortage of "cross-border players" in the Chinese auto industry for many years, but there is no doubt that the success of the new entrants in the passenger car market is bleak. Some companies in the non-automotive industry entered passenger cars. For example, the Waveguide, Chunlan, and Oaks currents have disappeared. Some well-known commercial vehicle companies have entered passenger cars. For example, young cars and Yellow Sea vehicles have also been struggling. However, in front of such cruel reality, Weichai also had to choose to enter the field of passenger cars.
Starting from 2011, affected by the country’s macroeconomic situation, the trend of domestic commercial vehicle market development along Changhong has never returned. Weichai's gross profit rate for the first three quarters of 2013 was 19.88%, which was only a 1.0% increase from the same period last year. It should be noted that its corporate profits have dropped sharply last year. At the same time, although the growth rate of the passenger vehicle market has narrowed in the past two years, it is still in a lucrative growth period. Take the example of Great Wall Motors, a leading SUV company. As of the A share closing on Friday, the market value of Great Wall Motors was as high as 126.882 billion. As the leading supplier of spare parts for commercial vehicle parts, Weifang has a market value of only 37.621 billion yuan. It is no wonder that Wei Xuan, head of Weichai, made the decision to enter the passenger car market.
Unlike previous mainframe factories, which are mainly upstream, in the field of passenger vehicles, end consumers have determined the survival and development of the company. In the future, Weichai will have to take advantage of talent introduction, marketing channel distribution and product quality as soon as possible in order to win a blood road in the field of passenger vehicles.
In terms of talent introduction, Weichai Yingzhi’s current management team has a reasonable mix. The company's general manager Ye Qing and Du Bin, deputy director of the Institute of Automotive Technology, belong to the overseas returnees, with emphasis on technology; executive deputy general manager Han Lisheng is the old Weichai, good at planning and financial management; marketing company general manager Xie Fenggao is the local car Marketing talent, previously served as deputy general manager of Changan Automobile Sales Company.
In terms of marketing channel layout, Weichai Yingzhi Motors did not follow the conventional 4S store model, and adopted various patterns including 4S stores to quickly deploy the network, gradually expanding from the core region to the whole country, and mainly attacking the 234 lines. City; in terms of market expansion, it is a flat “1+X†model led by prefecture-level cities. The idea of ​​channel development is to focus on the “3+5+7†key markets, including three core markets: Shandong, Chongqing, Sichuan; five key markets: Hebei, Henan, Jiangsu, Guangzhou, and Yunnan; and seven key markets.
In terms of product quality, Weichai has certain advantages in terms of powertrains and axles compared to its lack of core technologies. However, this advantage is limited to the commercial vehicle sector. In the field of passenger vehicles, the industry generally believes that Weichai's technological reserves are close to blank, and even worse than those of commercial vehicle companies such as JAC and Young Auto.
The author noticed that from the current layout of Weichai in terms of passenger cars, a route model similar to that used by Jiangling Motors to develop passenger cars was adopted. In the early stage, it launched its own SUV model to enter the passenger vehicle market, set up a platform to establish a personnel system, a supply chain system, and a dealer system; then it sought joint ventures with foreign automobile brands to achieve the growth of Weichai Yingzhi's brand and profit.
As a latecomer to the automotive market, Weichai's management is currently facing tremendous pressure. The first product is undoubtedly the right choice for the SUV. However, how do we ensure the quality of our products? Weichai people face a severe challenge. In the next three years, whether Weichai Electric can rely on SUVs, MPVs, pickups, and other three products in the passenger car market will be an important test of whether it can win the favor of foreign car brands. The future is whether it is the key to the catfish market or the passing passengers.
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