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Product and service optimization based on customer value never ends

To cope with the new normal of China’s heavy-duty truck market and prepare for 2016, Dongfeng Commercial Vehicle Co., Ltd. (DFCV) launched its new products for 2016 in Wuhan on December 15. The company also held the 4th Sales & Marketing Summit and the launching ceremony of its 2nd Truck Driver Competition on December 16.

Segment market is king

DFCV launched new products for segment markets such as trailer, load truck and heavy industry, and showcased its new technology, application and achievements at the conference. It went up one slot to second place in medium and heavy-duty truck market share ranking in 2015 and estimates a 28 percent increase in overseas market sales for the year.

Dongfeng and its joint venture partner Volvo collaborated in management, resources and other aspects and fully prepared for the new normal by launching new models in every segment, according to an executive of DFCV.

Xie Xiaohu, deputy director of DFCV product development department, introduced features of the nine new models:

Kinland Flagship Line Express Truck (H02L)

6×4 trailer; Weight: 9.5t; Engine: 13L; Power: 480 hp; Maximum torque: 2,300 Nm

Kinland Sail Fuel Saving Line Logistics Truck (T68L-026)

Engine: 11L; Transmission: 14-speed; Warranty: 40,000 km; No overhaul in 1.5 million-km operation

Kinland Sail Bulk Coal Transportation Truck (T63H-101)

6×2 trailer; Engine: 11L; Power: 420 hp; Fuel capacity: 450L; No overhaul in 1.5 million-km operation; Extended range 30% higher than industry average

Kinland Sail Main Line Express Delivery Truck (T61J-001)

Power: 420 hp; 4×2 air suspension; Shortest loading time; 300,000 km annual operation mileage; Saddle height ≤1,250 mm; Over ¥20,000 ($3,091) profit brought to customers annually

Kinrun Branch Line Express Delivery Truck (DFH5120XXYB2-KJ8V)

4×2 load truck; Fuel consumption: 15.5L/100 km; Adblue/Fuel ratio: 4%; Volume: 49m³; Economic speed increasing 10%; Beijing-V emissions standards-compliant; Highest utilization rate in domestic quick delivery industry

Kinland Bulk Cargo Standard Load Transportation Truck (DFL1311A10-K13X)

Engine: Dongfeng DDi75

Kinland KC Combined Transportation Slag Truck (K25B)

First Kinland dumper; three-year design; 700 mm ground clearance; Engineering vehicle specified air intake system, chassis technology, axle structure and bumper

Kinland KC Standard Load Transportation Slag Truck (K25Q)

Three-year designing; 700 mm ground clearance; Engineering vehicle specified air intake system, chassis technology, axle structure and bumper; Light-weight designing; 10% fuel-saving compared with engineering complex product; 60,000 km annual operation mileage; ¥36,000 annual savings

Road Combined Wheel Reduction Axle Truck (K36H)

8% uptime higher than industry average under complex working condition, ¥24,000 more profit annually; 26m³ volume, 6m³ larger than competitors; ¥30,000 more profit annually; lightest chassis in the industry

Gary Huang, president of DFCV, told CBU/CAR that the company plans to sell 118,000 units in 2016, 5,000 units more than the 113,000 units target set for 2015 in a media interview. According to Huang, the Dongfeng-Volvo alliance has operated smoothly since establishment and has accelerated joint development of new generation heavy-duty truck engines. Besides collaborating with Volvo in full-vehicle technology, DFCV has introduced management and value marketing of Volvo at the same time. The company aims to realize sharing among its three full-vehicle platforms, promote optimized JV products to the market, and enhance marketing capability. “Each product of DFCV has its target market, and we hope they all sell well in 2016,” said Huang. Huang also revealed that the company’s previous cooperation with Nissan did not have real gains at the beginning and it is too early to talk about benefits of the cooperation with Volvo. “Certain details will be disclosed later when the cooperation deepens,” added Huang.

The 4th Sales & Marketing Summit: Value, Development and Win-Win

Speakers from universities, the media, dealers and DFCV management shared their thoughts about China’s logistics industry, road freight and logistics industry transformation and ways to improve customer value at DFCV’s 4th Sales & Marketing Summit. Gong Jiajun, deputy director of DFCV product planning department, Xie Xiaohu, deputy director of product development department of DFCV technical center, Fang Yong, general manager of Weifang An Jun Da Logistics Co., and Cui Neng, green driving trainer of Volvo Trucks (China), also shared their views at the panel discussion.

Cai Linning, director of Tsinghua North Carolina Logistics and Enterprise Development Center, department of industrial engineering, Tsinghua University, pointed out that railway freight volume has gradually fallen from 2010 to 2014 and competition between railway and road transportation is intensifying. China Railway Corp., the largest railway transportation enterprise, aims to transform into the most competitive logistics company by accepting all kinds of goods, which would become a huge threat to road transportation. Cai believes that China will not see large change in freight volume and a decline is forthcoming. Besides, urbanization will be the fastest growing external influence. “The demand in China will transform from industrial logistics into consumer goods logistics,” noted Cai. The director also believes that consolidation is the future trend of China’s logistics industry, but will not reach the degree of that of the U.S. Internet+ has just entered into the commercial vehicle aftermarket and brought effects such as faster vehicle upgrade, vehicle lightweight, etc. The low cost and high efficiency requirement requests the use of new energy vehicles, lightweight vehicles such as aluminum alloy trailers, and multimodal transport as well as long distance communication to acquire location and freight volume information. Professional services such as cold chain logistics are also needed. “Cold chain is the last high tech pivot of the logistics industry,” said Cai.

Chu Fanghong, founder, chairman and chief editor of TUC Media, pointed out that different LCL Logistics enterprises will develop differently in China. For example, regional line enterprises will face the reshuffle and survival of the fittest situation, the regional network enterprises will go into consolidation, national network enterprises will transform from regular chain to franchise model, and drivers will turn into professional drivers, no vehicle carrier, or small fleets.

Stuart Lennie, global commercial vice president of DFCV, shared the content of the company’s customer relationship management (CRM) strategy, which includes talks with customers, dealers, employees facing customers and lists of the most important things collected from the talks. Lennie also listed Volvo’s quest to understand drivers of customer profitability. In this case, Volvo interviewed 118 customers for 300 hours. The interviews covered 22 countries and collected approximately 13,000 data points. Uptime, fuel efficiency, productivity, safety and driver performance are the top five concerns from customers, according to the interviews. He also took the Dongfeng T68L model as an example and listed the top annual cost of operations. For example, 49 percent are total fuel costs, 22 percent are registration, tax, road tolls and other administration, 10 percent are driver salary and 8 percent are annual capital cost. Insurance and driver turnover costs took 3 percent respectively, and tires cost 2 percent. “Every single customer needs a differentiated total solution,” said Stuart.

“Driver habits have critical impacts on truck fuel efficiency,” said Cui Neng, green driving trainer of Volvo Trucks China. Fuel consumption of the first prize winner was 15 percent less than that of the last one during the 1st DFCV Truck Driver Competition, and there was a 20 percent gap of fuel consumption between the winner and last place in the Volvo Fuel Saving Competition in 2015, according to Cui. Xie Xiaohu said the company can only reduce 5 percent fuel consumption after two years’ experiment, thus driver training is key for fuel savings.

Launch of the 2nd Driver Competition

DFCV launched its 2nd Dongfeng Kinland China Truck Driver Competition on the same day. The biggest difference is that the competition in 2015 was open to all trailer drivers nationwide and not restrained to Dongfeng Kinland truck drivers.

The 2015 competition also upgraded from an enterprise-level competition into a national level one with SAE China, Dongfeng Motor Group as organizers. Hosted by DFCV, the competition will also be co-hosted by Aeolus Tyre Co., Ltd., Dongfeng Motor Finance Co., Ltd. and Guizhou Huochebang Technology Co., Ltd.

“The 1st Dongfeng Kinland China Truck Driver Competition narrowed the gap between customers and the company and inspired us a lot and we will continue to hold the competition in the future,” Huang told CBU/CAR.

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