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Government joins enterprises to build a well-ordered and prosperous commercial vehicle market

The 2014 China Commercial Vehicle Congress was held on June 19 in Shanghai. Organized by CDMC Events, the congress attracted more than 100 executives from OEMs and suppliers, technicians, government officials and industry analysts. Speakers shared the latest policy trend, technology and company development with the audience. The following are highlights of the event. – Editor

Wan Xujun: Foton globalization path driven by strategic management

According to Wan Xujun, vice president of the Overseas Business Department of Beiqi-Foton Motor Co., Ltd. (Foton), the company will aim to become an automaker with “Internet Characteristics.” Raised by Wang Jinyu, president of Foton, the “Internet Characteristics” concept is customer oriented, which not only focuses on automobile products, but also endeavors in satisfying various customer demands in aspects such as work and life.

To achieve this goal, Foton will make itself a “world-class automobile enterprise” through five strategic transformations. First, it plans to transform from a low-end commercial vehicle maker to a high-end one in China (which means medium-end in the world market). Second, it will extend the golden chain of commercial vehicles. Third, it will transform from producing investment products to producing consumption products. Fourth, it will transform its business emphasis from domestic market to overseas market. Fifth, it will transform from manufacturing-focused to service-focused player.

Foton targets at becoming a comprehensive world-class enterprise with high degree of integration of modern technology and environmental protection in 2020. Estimated sales in 2020 will be over four million units with ¥500 billion ($80 billion) in sales revenue and ¥30 billion in profits, said Wan.

Foton has divided its international market into three levels based on industry maturity and market maturity. Countries and regions in level one include the European Union, Japan, South Korea, and North America. Level two countries include India, Russia, Brazil, Indonesia and Mexico. Other developing countries and China belong to level three. Foton plans to take the lead in the level three markets, gradually promote the industrialization in level two countries, and make breakthrough in level one markets after 2016. 

According to Wan, Foton will finish its industrialization layout in India and Russia from 2011 to 2015, and speed up industrialization in Mexico, Brazil and Indonesia after 2015 to reach an annual production capacity of 500,000 vehicles in five production centers overseas.

The world-class “medium-end” products, according to Wan, are to reach world-level test standards without redundant design. The products will be capable of entering developed market and pursue the highest performance price ratio worldwide. Quality of Foton products will reach the standards of target market customers, equivalent to medium-end in top markets and medium- to high-end in developing countries.

Foton plans to sell 136,700 commercial vehicles overseas by 2015 and 445,100 units by 2020, added Wan.

Foton sold 670,000 vehicles globally in 2013, including 48,000 vehicles exported, ranking second among commercial vehicle exporters in China.

After nine years of development, Foton’s sales network currently covers more than 110 overseas countries and regions. The company established nine KD (knocked down) plants in 2013 and will add 16 more in 2014 and eight more in 2015 to own 52 KD plants in total.

KD plants of Foton will cover regions such as Southeast Asia, Western Asia, Northern Africa, Middle and South America, Central Asia, and South Asia with a production capacity of 130,000 units in total. Foton had registered its brand in more than 130 overseas countries and regions by April 2014, said Wan.

Foton owns various financial service products and plans to further support dealer financing in Columbia, Peru, Tanzania, Saudi Arabia, Kenya and Angola with financing amount of ¥450 million.

The international strategic development of Foton involves projects in Russia, Brazil and Thailand.

Foton will adopt a progressive mode in Russia, starting from China Business Unit (CBU) to KD to local production. The company has established its manufacturing and operation center in Brazil, and will gradually build up a plant with annual output capacity of 100,000 vehicles with strategic partners such as Cummins and Meritor.

Foton has also finished the developing program of Southeast Asia and is starting to register a company in Thailand, said Wan.  

 

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