WABCO and FAW Jiefang’s strategic cooperation agreement signing on June 26 comes less than a week before China puts into effect the China V emissions standards for heavy-duty diesel vehicles nationwide on July 1.
The two events might not be interrelated and it could just be a coincidence, but upon closer “inspection” of the strategic intent of the two partners, it is clear that the move prepares both to face the tougher regulatory environment led by the more stringent requirement of the latest emissions standards equivalent to Euro V.
The agreement between WABCO and FAW Jiefang in itself is not surprising since the two has worked with each other for more than 20 years already via a supply relationship. The strategic framework agreement calls for the two partners to work together to advance braking systems, chassis components and other technologies to enhance the safety and efficiency of FAW Jiefang’s trucks and fleet operators in China. And, as Yu Sujie, vice president of Asia Pacific and business leader for China for WABCO, said in a statement, WABCO wants to take its collaboration with FAW Jiefang to the next level as it strives to enable safer, greener and more efficient commercial vehicles in China. Hu Hanjie, president of FAW Jiefang, pointed out that WABCO’s high-performance braking systems and other world-class technologies represent a real differentiation in the markets that his company serves and will help FAW Jiefang to build more competitive trucks for China and globally.
One is a leading global supplier of commercial vehicle safety, efficiency and connectivity technology with nearly 150 years of history, the other is part of FAW Group – the cradle of China’s auto industry, and China’s leading medium and heavy-duty truck brand (really the only over performing Chinese brand under the FAW umbrella). It is no surprise that they have come together simply because FAW Jiefang, in order to maintain its leadership position amid tougher regulatory environment and rising demand from customers, has to depend on a seasoned supplier such as WABCO to provide its vehicles and fleets with the latest technologies to continue to differentiate itself from the rest of the pack. WABCO, on the other hand, must utilize FAW Jiefang’s leading position and treat it as a leading customer as a strategic partner who in turn helps it market its leading technologies through its products.
The cooperation will help FAW Jiefang better confront tougher regulatory environment ahead especially as the China V emissions standards and other related policies kick in.
It won’t be surprising to see similar such cooperation among heavy-duty truck makers and key suppliers like WABCO in the future.