Europe as en­gine of new growth

Guangxi YuchaiMachin­ery roars into de­vel­oped mar­kets with Euro 6-com­pli­ant ve­hi­cle machines

China Daily (USA) - - BUSINESS - By YANG ZIMAN and ZHANG LI in Nan­ning Con­tact the writ­ers at yangz­i­man@chi­ and zhangli@chi­

Guangxi Yuchai Ma­chin­ery Group Co Ltd, the largest in­ter­nal com­bus­tion en­gine man­u­fac­turer in China, aims to tap de­vel­oped mar­kets in Europe by co­op­er­at­ing with top Euro­pean en­gine pro­duc­ers, ac­cord­ing to top ex­ec­u­tives of the com­pany.

Founded in 1951 and head­quar­tered in Yulin, Guangxi Zhuang au­ton­o­mous re­gion, Yuchai Ma­chin­ery has been the stan­dard-set­ter as far as Chi­nese in­ter­nal com­bus­tion en­gines are con­cerned. Its as­sets are worth 32.7 bil­lion yuan ($4.9 bil­lion).

“We al­ways look up to the emis­sion stan­dards of West­ern coun­tries, stay­ing ahead in tech­no­log­i­cal ca­pac­ity. Now, we are build­ing en­gines that meet the Euro 6 emis­sion lim­its that are in ef­fect in Europe since 2013,” said Guo Dem­ing, deputy Party chief of Yuchai Ma­chin­ery.

China is go­ing to im­ple­ment the fifth gen­er­a­tion of na­tional emis­sion stan­dards in an all­round way in 2017, which are the equiv­a­lent of the Euro 5 emis­sion lim­its ob­served in Europe from 2008 to 2013.

Un­der the Euro 6 emis­sion lim­its, soot emis­sion per kilo­me­ter must be lower than 5 mil­ligrams and ni­tric ox­ide per kilo­me­ter lower than 80 mil­ligrams, which are one­fifth and one-fourth re­spec­tively of the Euro 4 stan­dards.

“Au­to­mo­bile emis­sions that meet the Euro 6 stan­dards are even cleaner than the av­er­age air qual­ity in Bei­jing,” said Guo.

Keep­ing up with the top stan­dards helps Yuchai Ma­chin­ery to en­ter de­vel­oped coun­tries, where the recog­ni­tion of Chi­nese brands is not high, ac­cord­ing to Huang deputy gen­eral man­ager Yuchai Sales Com­pany.

“De­vel­oped coun­tries have ma­ture mar­ket econ­omy rules. Hav­ing a pres­ence in these coun­tries is a touch­stone for our own com­pe­tence. We will suf­fer great losses if our prod­ucts in these mar­kets are found to be prob­lem­atic, which is a driv­ing force for us to keep im­prov­ing the qual­ity of our prod­ucts,” saidHuang.

At the mo­ment, more than 90 per­cent of Yuchai Ma­chin­ery’s sales are con­cen­trated in South­east Asia, the Mid­dle East, South Amer­ica and Africa where in­fra­struc­ture con­struc­tion is taking off. The 10 mem­ber-coun­tries of ASEAN rep­re­sent its largest mar­ket. In 2015, they ac­counted for sales of 30,000 units out of the to­tal over­seas sales of 40,000 units.

Yuchai Ma­chin­ery has been col­lab­o­rat­ing with­FEVGmbH in Ger­many, one of the top three au­to­mo­bile en­gine com­pa­nies in the world, Ri­cardo Plc in Britain and AVL List GmbH in Aus­tria. It has a re­search cen­ter in Aachen, Ger­many, where the RWTH Aachen Univer­sity acts as a ta­lent pool for FEV.

Yuchai Ma­chin­ery has re­cently signed an agree­ment with MTU, a Ger­man man­u­fac­turer of large diesel en­gines and com­plete propul­sion sys­tems, to es­tab­lish a joint ven­ture. The JV will use MTU’s tech­nolo­gies related to its S4000 en­gine se­ries to pro­duce high-end, high-power and high-speed auto en­gines in both China and over­seas.

Mean­while, YuchaiMachin­ery is co­op­er­at­ing with Brunel Univer­sity in Britain on oil and gas hy­brid power re­search.

“Hy­brid power is the fu­ture. Yi, of

We al­ways look up to the emis­sion stan­dards ofWestern coun­tries...

Guo Dem­ing, It is used in high-end cars, which con­sumes slightly over 3 liters of oil per 100 kilo­me­ters. As the emis­sion stan­dards in­crease, new en­ergy en­gines will en­joy a big­ger mar­ket,” saidHuang.

Yuchai Ma­chin­ery in­vests 3.5 per­cent of its rev­enue in re­search and devel­op­ment. It has more than 3,000 patents with 500 to 600 new patents com­ing up ev­ery year. Even though it is strictly con­trol­ling its op­er­a­tion costs at the mo­ment, the R&D in­vest­ment has never been cut.

“The con­sis­tent re­search ef­forts have put Yuchai Ma­chin­ery on a par with foreign brands. It first dis­tin­guished it­self from foreign com­peti­tors in the bid for bus en­gines for the Bei­jing Olympics in 2008. Since then, Yuchai Ma­chin­ery has been the ma­jor au­to­mo­bile en­gine sup­plier for ma­jor events such as the Two Ses­sions (the an­nual gath­er­ings of the Chi­nese na­tional leg­isla­tive and po­lit­i­cal ad­vi­sory bod­ies) and the Hangzhou G20 Sum­mit,” said Huang.

Yuchai Ma­chin­ery has 15 of­fices and 133 ser­vice sta­tions over­seas that help sell its prod­ucts to 170 coun­tries and re­gions. In 2015, over­seas mar­kets ac­counted for 11 per­cent of to­tal sales.

From 2011 to 2015, Yuchai Ma­chin­ery ex­ported 166,000 en­gines to over­seas mar­kets, up more than 50 per­cent com­pared with the 2006-10 pe­riod.

deputy party chief of Yuchai Ma­chin­ery

Yang Qiu in Guangxi Daily con­trib­uted to the story.


A Yuchai worker as­sem­bles a diesel en­gine at a work­shop in Yulin, Guangxi Zhuang au­ton­o­mous re­gion. More than 90 per­cent of Yuchai Ma­chin­ery’s sales are now con­cen­trated in South­east Asia, the Mid­dle East, South Amer­ica and Africa where in­fra­struc­ture con­struc­tion is taking off.

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