Serving the World's Largest Emerging Automobile Market
Home > Interview > Independent technology and quality networks

Independent technology and quality networks

− China on Wheels: The Transformation of Personal Mobility (XII)

The members of China on Wheels, an expedition of 12,500 km in 45 days through 16 provinces on three locally made cars Dongfeng Aeolus H30 Cross, JAC Rein and Hawtai B11, arrived in Ma’anshan on October 31, 2011. The team visited Anhui Hualing Auto Co., Ltd., (China Automotive Manufacturing Corp. or CAMC in English) and had an exclusive interview with vice president Wang Yan’an. Established in 2003, CAMC has become the country’s leading special-purpose heavy-duty truck manufacturer. – Editor

Dump truck maker

China on Wheels: Please tell our readers about CAMC and your trucks.

Wang Yan’an: CAMC formerly was a machine shop affiliated to the Ma’anshan Water Co. and it made simple machines such as abrasive wheel cutters. The company began making refitted vehicles in 1978.

(Photo: CMAC main entrance in Ma’anshan)

CAMC was founded in 2002 and began making heavy-duty dumpers in March 2004. The major decline of China’s heavy-duty market in 2005 did not affect us. On the one hand our first year sales were small. But on the other hand our dumpers were more advanced.

In the three years from 2005 to 2007, CAMC’s output grew from 6,000 to 12,000 and then 18,000 units. Sales continued to grow in the first half of 2008 but stopped in the second half due to the world financial crisis. The market rebounded in 2009 and we made a total of 31,000 heavy-duty trucks in 2010, the most prosperous year for the company.

In the next five years, our goal is to make 100,000 vehicles and realize ¥500 million ($79.37 million) in sales revenue by 2015.

China on Wheels: When did CAMC get public listed?

Wang: We did it with Xingma Auto, which was listed in 2003. After injecting capital into Xingma, we became a wholly-owned subsidiary to Xingma, and therefore a public-listed company.

China on Wheels: Who are CAMC’s shareholders?

Wang: CAMC is a state-owned enterprise with Ma’anshan municipal government as the main shareholder.

During the past few years, we have developed high-end trucks compared with our first generation of trucks. We purchased heavy-duty automatic beam welding equipment in order to get rid of the human factor. We started building dealer networks in 2004 and by now we have 200 dealers in the country. CAMC plans to have at least one dealership in each province and region, to a total of 500-600 in the future.

China on Wheels: Are these franchised dealer?

Wang: Yes. CAMC trucks are popular in Southern China and coastal areas. We first marketed our high-end trucks in developed regions such as Fujian, Zhejiang, Jiangsu and Guangdong. We gradually moved upwards to the West and Northeast regions.

(Photo: Wang Ya’an)

Quality product and service

China on Wheels: Does CAMC offer financing?

Wang: CAMC works with large banks such as the Bank of Communications and the China Everbright Bank to offer consumer financing.

China on Wheels: Do you have your own financing company? How much is the down payment for a heavy-duty truck?

Wang: We have established one in Shanghai and have been offering loans. A minimum down payment of 30 percent is required by the banks. But we are somewhat flexible. Customers in Southern China mostly prefer paying in cash. In poorer northern China, the down payment can be 20 percent and the company would advance the additional 10 percent to qualified customers. In the case of financial crisis when a customer is unable to make payments, we can buy back the vehicle.

China on Wheels: How are CAMC trucks developed?

Wang: First of all, we position ourselves not merely as a truck manufacturer. We have been trying to build a service company, providing not only truck products but also financing and aftersales service. Secondly, we have made Benz and Scania our models in independent innovation. CAMC owns full IPRs of many of our products. The company produces cabs, frames, front and rear axles, electric devices and wire harnesses independently.

People often say that tucks made in China are of similar quality, which is not true. The qualities of Dongfeng trucks are different from those made by FAW and CAMC trucks are different from those made by Dongfeng. We may have the same powertrains as Dongfeng, but the body, frame and electric systems on our trucks are unique.

(Photo: CAMC trucks)

Trucks exported by CAMC are compliant with European standards. That is why CAMC trucks are more expensive yet more popular among consumers even though we came to the market at a much later date. With CAE and optimization of vehicle structure, CAMC is able to make powerful trucks with lighter structures, therefore saving fuel. Our powertrain is excellent. We have been working with several higher education institutions to develop our products, such as front axles.

Training

China on Wheels: What are your prospects in realizing 100,000 units in annual production by 2015? We are confronting a slump market this year and there’s little chance that it can get much better in 2012. Many multinationals are in talks with Chinese companies for cooperation in new heavy-duty projects. Emerging heavy-duty makers, such as C&C Trucks and Dayun Motor, are jumping into the pool of players. How will CAMC cope with intensified competition?

Wang: CAMC emphasizes on talent cultivation. Although we have only a few hundred engineers, we have been able to make the most advanced heavy-duty trucks in China. We don’t hire as many foreign talents or overseas returnees as other enterprises do, because those people do not quite understand China’s actual conditions. We send our own talents to higher institutions for training or offer on-the-job training through cooperative projects with overseas counterparts. Sending our engineering staff to purchase engines and chassis from overseas suppliers offers an excellent training experience.

(Photo: China on Wheels members and CAMC executives)

China on Wheels: CAMC’s trucks were based on Mitsubishi technology. Do you still have a technical relationship with Mitsubishi?

Wang: We worked with Mitsubishi in our first generation of trucks. But gradually we realized that Japanese technology could no longer satisfy our needs. We have started working with European suppliers recently, such as IBS of Germany. A large German supplier most recently visited CAMC for business discussions.

Export

China on Wheels: How is CAMC doing in export?

Wang: CAMC started exporting trucks in 2005, first to African and Middle East countries such as Algeria, Morocco, Libya, Syria, Saudi Arabia, Kuwait, Iran and Iraq. We also sell to Malaysia, Thailand and Indonesia. CAMC is building sales networks in Brazil, Argentina and Chile in South America. But China will always be our major market.

We have about 50 staff in our overseas department. Export is now contributing around 15 percent of CAMC’s total sales revenue and it is growing.

China on Wheels: How do you compete with well-known manufacturers in Japan, the U.S. and Europe?

Wang: Many joint venture companies have their own maintenance and service centers worldwide through their partners such as Cummins or ZF. So our exported products can be serviced by these centers. CAMC is also building its own service network. We use Fast Gear transmissions on our domestic trucks but ZF transmissions on exported trucks.

China on Wheels: Do you still manufacture the T850 based on Mitsubishi technology?

Wang: The T850 is an outdated model seen in the 1970’s and 1980’s. We are currently using technologies of the F415 and F515.

China on Wheels: How’s your competitiveness abroad?

Wang: We are still lagging behind the U.S. and European companies, but we are quite competitive in developing countries. For example, many African countries do not even have auto industries. Countries like Malaysia and Indonesia can make only SKD assemblies but do not have the capabilities in developing their own trucks.

We will definitely enter developed markets such as the EU and the U.S. with improvement of our technologies and human resources. But I cannot give you a timetable.

(Photo: Please find photo of Hualing truck exhibited at Hannover that was used in CAR before)

China on Wheels: Chinese passenger vehicle manufacturers still lack core technologies in engines, transmissions and electronics. Is this the same problem with truck manufacturers?

Wang: We do need to improve independent innovation in key assemblies such as front and middle axles. If we are unable to do certain things ourselves, we should still rely on introducing technologies from overseas.

China on Wheels: China’s medium and heavy-duty truck sales exceeded one million last year. What is the market potential in the next 10 years? Will the market double in size?

Wang: China’s commercial vehicle market will continue to grow in the next 5-10 years. The large western areas in China, such as Xinjiang, Qinghai, Tibet, Gansu and Inner Mongolia, will have great potential demand. Growing demand will also come from emerging markets in Southeast Asia and Africa.

Total sales of medium and heavy-duty trucks may reach 1.5 million units eventually, especially with improved logistics and growing demand for dumpers in underdeveloped regions.

China on Wheels: Does CAMC have labor shortage problems?

Wang: We don’t have much of a problem because our employees are well paid. The average annual income of our employees was ¥50,000 last year.

(Translated by Jennifer Chen)

| | |

Leave a Reply