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China's largest diesel engine manufacturer, Weichai Power Co., Ltd. (2338 HK), has signed a strategic cooperation agreement with Weifang, the world’s largest auto parts manufacturer, Bosch (BOSCH). Since then, Weichai Power has teamed up with the world’s automotive giants to share innovations, advance toward high-end technologies, and seize the Euro III and even higher standard engine market.
According to the agreement, Bosch will cooperate with Weichai Power in the development of high-power, high-speed diesel engine fuel injection systems.
Cooperate with and support each other on supply, and conduct corresponding development and matching work according to the characteristics of commercial vehicles in the Chinese market. This cooperation will follow the world development trend of the automotive industry and power products. It will greatly promote the engine's energy-saving index, power performance, safety performance and stability, and create a new high-quality Chinese power product.
Weichai Power is China's largest internal-combustion engine manufacturer and the world's largest high-power high-speed engine production base. The company's main products are the 10-liter and 12-liter large-displacement WD615 and WD618 diesel engines, with emissions reaching Euro II and Euro III standards. In the newly developed engine products in 2006, the consumption of diesel fuel was reduced by 15% compared with similar domestic products, reaching the world's advanced level. The Chinese government awarded the China Famous Brand and China Well-known Trademark, which is the first power brand of China's high-power engine.
The Bosch Group is one of the world's leading manufacturers of automotive technology, industrial technology and intelligent technology. It has established 270 branches worldwide, of which 230 are located outside Germany. Bosch has now become a highly international multinational group, with sales of 40 billion euros in 2004. As the world leader in automotive component technology, Bosch invented the world's first spark plug with high-voltage electromagnetic ignition system, and the newly-produced electro-hydraulic braking system, Bosch has created countless state-of-the-art Bosch technology. As the world's largest independent supplier of automotive OEM equipment, Bosch has up to 120 production sites. In 2005, global sales revenue reached 42 billion euros.
Weichai Power, a world-renowned power brand, has been aiming for the world's latest engine technology over the years and is constantly upgrading its own technology platform. In particular, on the research of engine emissions technology, Weichai has concentrated on the most capable scientific research forces. Last year, it successfully developed the first domestic blue-pump WP10 and WP12 Euro III engines, and pioneered the use of diesel common-rail electronically controlled fuel injection technology. It integrates computer control technology, modern sensor detection technology and advanced fuel injection structure into a single body. It not only achieves higher injection pressure, control of injection pressure and fuel injection quantity, but also enables pre-injection and post-injection. Diesel engine noise and exhaust emissions are greatly reduced. The application of this new technology not only satisfies the requirements of Euro III regulations, but also enables this new type of engine to have the potential of Euro IV development. It is the most environmentally friendly diesel engine for vehicles with a capacity of 300 horsepower or more. This product is now on the market in volume.
According to the strategic plan of Weichai Power, by the end of the “Eleventh Five-Year Planâ€, it is necessary to build a full range of clean power products ranging from 1 liter to 15 liter displacement, 30 KW to 470 KW, in line with Euro IV emission and above, and continue to maintain heavy truck and engineering in the company. The dominant position in the machinery market has become a full range of suppliers for the commercial vehicle and construction machinery engine markets. The strategic cooperation with Bosch can be said to have opened the prelude to Weichai climbing this goal. As one of the most important components of diesel engines, the fuel injection system plays a key role in improving the quality of gas emissions and fuel efficiency, and Bosch has a globally indisputable technological R&D strength in this area. The strategic cooperation between the two parties marks the world's leading position in fuel injection technology for high-power, high-speed engines produced by Weichai Power.
One is China's largest internal combustion engine manufacturing enterprise, and the other is the world's largest auto parts manufacturer. The two companies are actually partners for many years and have a good cooperation background with each other. In the past five years, Bosch and Weichai Power have cooperated well on the fuel injection system project. Weichai's Euro II and Euro III engines use Bosch's fuel injection system and are the core components purchased by Weichai Power. Bosch has become one of the largest suppliers of Weichai power. Dr. Walz, executive director of global sales and matching for the diesel system of Germany's Bosch Corporation who came to attend the signing ceremony, said that this time the two parties concluded a strategic alliance, Weichai Power will become Bosch's only strategic ally in the Chinese power industry, giving the industry A new look. This is not only the need for the two companies' international development strategy, but also the need to participate in international competition. It will help combine the advanced technologies of Europe with China's national conditions, and introduce engines with dual advantages of price and technology that are suitable for the Chinese market; it will help establish an international, rapid and flexible market for R&D and production mechanisms; it will help complement each other's advantages. Create engine manufacturers with strong technical capabilities.
Weichai Power stated that the conclusion of this alliance is another result of the innovation of linkage and is an innovation in the development mode of the enterprise. Tan Xuguang, chairman and chief executive officer of Weichai Power, said that in the increasingly fierce market competition, the industrialization division of labor has become increasingly sophisticated. It is difficult for one company to obtain competitive advantage by going it alone, and the entire industry chain must be optimized and integrated. Linking together, integrating upstream and downstream enterprises in the industrial chain, breaking the model of closed independent innovation of individual enterprises, thereby creating a new realm of independent innovation for enterprises and enhancing the competitiveness of the entire industrial chain. Weichai Power, as the largest manufacturer of high-power diesel engines in China, has its own successful and practical experience in integrating system knowledge and integrating system innovation.
Tan Xuguang also pointed out that the reason why Weichai has the largest customer base in the Chinese market is that the company holds the core technology that has always been in a leading position, especially the exhaust brake with proprietary intellectual property rights launched by the company in 2006. (WEVB) technology has not only made the brake system of heavy trucks more secure and reliable, but also pioneered the safety concept that “wealth is important and life is more important†among customers, which has been widely welcomed by customers. This time, it has concluded a strategic alliance with Bosch, a world-famous supplier of auto parts, and has fully optimized and integrated price, brand, technology and service advantages. This will undoubtedly bring the chained innovation to a new level. And level, greatly enhance the company's core competitiveness.
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