Ten days later, 2022 will be the past. As the backbone of the national manufacturing industry, the equipment manufacturing industry has been stirred by Tan Xuguang for several times recently. First went to Shanghai, then went to Linyi. Under the promotion of Tan Xuguang, Shandong Heavy Industry, Weichai Group and China Longgong signed an agreement on comprehensively deepening strategic cooperation on December 15; On December 16, Weichai Power signed a strategic cooperation agreement with Lingong Group. If the time scale is moved forward a little, XCMG will also sign a strategic cooperation agreement with Weichai Power on September 5 this year.

By linking these independent events together and putting them in front of the backdrop of the Central Economic Work Conference, which will make expanding domestic demand the top priority of next year's work and the official implementation of non road four stage emission regulations, it can be seen that as a strategic entrepreneur who is good at grasping historical opportunities, Tan Xuguang has been ready to "take the lead and fight hard". After a detailed analysis of the cooperation direction and content between Weichai Power and the three leading enterprises in the equipment manufacturing industry, we can see Tan Xuguang's strategic route of seeking stability in the changing world, moving from complexity to simplicity, and locking in the uncertainty.

Respond to changes with unchanged: contribute to Weichai's plan in the four stages of non road

It was noted that only half a month after the implementation of the "National Fourth" standard for non road mobile machinery on December 1, Tan Xuguang visited two "old friends" of more than 20 years: China Longgong and Lingong Group on December 15 and 16.

Since its establishment in 1993, China Longgong has maintained a high degree of coordination with Weichai Power. On the official website of Longgong, the words of Li Xinyan, the founder of Longgong in 2018, when he led a team to visit Weichai, were also hung: "For Longgong, every time before arriving in Weichai, it is a kind of expectation and vision, and after visiting and studying, it is a kind of shock and admiration." When signing the strategic cooperation agreement, Li Xinyan sent Tan Xuguang the eight words "the most trusted friend".

At the temporary work site, Tan Xuguang and Chairman Wang Zhizhong had a discussion, recalling the "mutual help" for more than 20 years. Both sides have gone through the three or two stages of the road together. Tan Xuguang mentioned that we should use the concept of "mutual trust, sharing, competition and cooperation" to promote the two sides to become "permanent, loyal and close" strategic partners and work together to become world-class.

On September 5, 2022, Tan Xuguang visited XCMG, a leading enterprise in the field of construction machinery, and was warmly received by XCMG Co., Ltd., Chairman of XCMG and Secretary of the Party Committee Wang Min. Both parties signed a strategic cooperation agreement. In 2018, Weichai Power also signed a strategic cooperation agreement with XCMG. Wang Min said Weichai is one of XCMG's "core strategic partners".

For XCMG, Lingong and Longgong, Weichai has always fully supported their development in the past 20 years, whether in a blowout or a downturn, whether in the domestic or international market. On December 1, the implementation of non road four stage standards was not only a major "shuffle" for the entire construction machinery industry, but also a comprehensive examination. From engine technology upgrading to vehicle system matching, from market promotion to oil supply, there will be a new wave of upgrading.

How to win the "National Fourth" era of construction machinery? Only when parts enterprises and complete machine enterprises maintain closer cooperation and mutual trust can they develop products that meet emission regulations and meet the needs of end customers. As a "chain owner" enterprise in the equipment manufacturing industry, Tan Xuguang did not simply treat the strategic cooperation with XCMG, Longgong and Lingong from the perspective of "engine supplier", but under the guidance of the dual carbon strategy, the head complete vehicle enterprise of LinkedIn played a demonstration and driving role, realized a leap in the quality of new products through technological upgrading, and continued to lead the high-end upgrading of the construction machinery industry with higher added value and better customer experience, To jointly build a world-class construction machinery enterprise.

Relying on the high R&D investment in the past 10 years, Weichai firmly holds the core technology advantages and completes the development of a full range of non road four stage products in advance. In December 2021, Weichai Power will take the lead in releasing a new generation of "N+H" full series of non road four stage products, covering WP2.3N, WP3.2, WP4.6N, WP7, WP7H, WP10H, WP13, WP13H, WP17 and other full series of non road national four stage products of construction machinery, with displacement ranging from 2.3L to 17L and power ranging from 36.8kW to 566kW.

It is understood that Weichai's non road four stage power can save more than 10% fuel compared with the three stage power. This is due to Weichai's unique fuel saving "black technology".

It is understood that in 2020 and 2022, Weichai has successively released commercial diesel engines with body thermal efficiency exceeding 50.23%, 51.09% and 52.28%, which has repeatedly broken the global diesel engine thermal efficiency record. The higher the thermal efficiency of the body, the better the fuel saving performance of the engine. As a full range of power system providers in all fields, Weichai has highlighted its competitive advantages in technology integration, applied high thermal efficiency fuel saving technology to four stage products of construction machinery, and formed an industry-leading fuel saving technology system. With the same configuration of engineering machinery and equipment, Weichai engine is used for the same project. The less oil is used, the less emissions will be, so as to achieve the dual benefits of economic and environmental protection. Taking excavator as an example, Weichai has reduced the comprehensive fuel consumption of matched complete machine products by 15% and increased the efficiency by 10% on the basis of commercialization of thermal efficiency technology. For these "oil tigers" of construction machinery, this is a direct visible competitive advantage.

Wang Zhizhong, Chairman of Lingong Group, said: "From the perspective of the market, it is obvious that Weichai engine has made rapid progress, and its key core technologies and main performance indicators have achieved international parallel and lead."

Excellent products are the basis for Xugong, Longgong and Lingong to "hold hands" with Weichai. Taking loaders as an example, more than 20 major domestic manufacturers will sell 140509 loaders in 2021. These three enterprises are all in the leading camp, equipped with engines of Weichai Power. Data shows that in the field of construction machinery, Weichai will sell about 200000 engines for construction machinery in 2021, including the excavator market, which has doubled; In the loader market of 3 tons and above, the market share is about 80%; In the truck crane market, the market share is about 65%; In the wide body dump truck market, the market share is about 83%.

Turn complexity into simplicity: people have nothing but themselves

Recently, mainstream financial institutions such as HSBC, Daiwa and Citigroup have all raised the rating and target price of Weichai Power. In the research reports of leading securities companies such as Tianfeng Securities and Ping An Securities, it is mentioned that after nearly ten years of adjustment, Weichai Power has grown from a single engine company to an international company with diversified and balanced business structure, controlling a large number of key core technologies, and forward-looking layout of new energy and new business forms. "The engine label can no longer represent Weichai Power".

In the field of construction machinery, hydraulic devices are the core components. For example, the excavator with the most application scenarios needs a series of work such as hydraulic pump, control valve and hydraulic cylinder to transmit the power of the engine to the mechanical arm. The global hydraulic system has been monopolized by Bosch Rexroth of Germany, Eaton of the United States and Kawasaki of Japan for a long time. Tan Xuguang once said that China had 100000 excavators of its own brand every year, all of which used imported hydraulic parts.

In 2012, driven by Tan Xuguang, Weichai Power strategically reorganized Kaiao Group and its subsidiary Linde Hydraulic Company, realizing a historic cooperation across the Eurasian continent. The high-end hydraulic technology of Linde Hydraulics has directly promoted the construction of Shandong medium and high-end hydraulic R&D and manufacturing base, and supported Weichai to make full use of its advantages in engine, hydraulic, electronic control and other fields to build the golden engineering machinery hydraulic power assembly.

At Weichai Power's 2019 performance conference, Tan Xuguang said: "The company has created a hydraulic power assembly with completely independent intellectual property rights in China, and this product will become an important growth point of the company in the next 3-5 years." Tan Xuguang said that Weichai's hydraulic products have entered the excavator supporting market of more than 20 tons in succession, and he is confident that they can achieve 50% of the market share, and even reach 80% like the engine supporting loader!

As the saying goes, those who do hydraulic work do not do engines, and those who do engines do not have hydraulic work. In Weichai Power, this has become a reality. In the Strategic Cooperation Framework Agreement signed by Weichai Power and XCMG, it is clearly mentioned that "deepen strategic cooperation in hydraulic parts and other fields to achieve win-win". When visiting Lingong Group, Tan Xuguang also said: "Weichai will give full play to the advantages of high-end hydraulic power system integration and go all out to provide the most powerful support for the development of Lingong Group."

Now, in the construction machinery market, XCMG ranks the third in the world with the first achievement in China, with the sales volume reaching US $18.101 billion. Cranes and excavators occupy the head position; Shandong Lingong is one of the top 50 construction machinery companies in the world, with the sales of loaders, excavators and rollers exceeding US $6 billion; In 2021, the sales volume of China Lonking will reach 16.84 billion yuan, including 6.61 billion yuan of loader sales revenue, 3.52 billion yuan of forklift sales revenue and 1.87 billion yuan of excavator sales revenue. Weichai Power's golden construction machinery hydraulic power assembly will have a wider application space in these leading enterprises.

In 2021, Weichai Power will issue a fixed increase announcement of 13 billion yuan, of which 3.1 billion yuan will be used for the full range of hydraulic power assembly projects and large-scale CVT power assembly projects. On April 7 this year, Weichai Power replied when answering investors' questions: "After batch quantitative market verification, Weichai Power's hydraulic power system has absolute advantages, with efficiency increased by 10%, fuel consumption reduced by 15% - 21%, and noise reduced by more than 2 decibels. In the future, Weichai Power will provide the whole society with hydraulic power assembly systems, and strive to increase market share through obvious differentiation advantages."

Weichai Power's power assembly solution of "engine+Linde hydraulic" will greatly change the global hydraulic manufacturing pattern.

In addition to hydraulic pressure and gearbox, Shaanxi Fast, which is held by Weichai, has formed a monopoly in China, accounting for about 80% of the market; In terms of vehicle and bridge, Shaanxi Hande Vehicle and Bridge Co., Ltd. under Weichai also has an absolutely leading market share in the field of engineering machinery vehicle and bridge.

On the non road "National Fourth" track, in the field of engineering machinery, Weichai Power has verified the core comparative advantage of "people have nothing, people have everything" with its strength.

Lock in certainty in uncertainty: preempt the "window period" under the counter cycle

At present, the short-term economic cycle of the equipment manufacturing industry is in the reverse cycle, and the industry enterprises are facing double challenges brought by the reduction of external market demand and their own transformation and upgrading. Tan Xuguang has a clear understanding of this. He said: "In our industry, if we cannot break away from the traditional limitations of equipment manufacturing, we will be crushed by the high-speed wheels of historical development!" In recent years, Weichai Power has also been making cross cycle product adjustments.

Under the pressure of dual carbon targets, construction machinery, as a key industry for non road emission remediation, has been deployed in the new energy field by major manufacturers. Take the leading enterprise XCMG as an example, in recent years, it has launched a series of new technologies and new products that are first launched in the world, independent innovation and breakthrough, such as the first electric loader, the first unmanned electric loader in the industry, etc., all of which are at the forefront of the industry. In addition to electrification, many leading enterprises actively promote zero carbon emission hydrogen energy of construction machinery and equipment.

According to the report of Yingda Securities, "new energy construction machinery has obvious economic benefits. With the gradual improvement of the battery industry chain, the price of battery packs has decreased rapidly, and new energy construction machinery has more advantages." According to his analysis, at present, the energy of traditional construction machinery is mainly diesel, and the penetration rate of new energy construction machinery is less than 1%. Under the background of policy promotion and environmental pressure, the penetration rate of new energy of construction machinery will increase rapidly in the next few years.

It is noted that in the Strategic Cooperation Framework Agreement signed by Weichai Power and XCMG, it is clearly stated that the two sides "will deepen strategic cooperation in new energy products and other fields".

Weichai Power has invested 4 billion yuan in new energy business since 2010. At present, Weichai has firmly grasped the three major technical routes of "pure electric+hybrid+fuel cell", especially in the field of fuel cells. It has strategically restructured the hydrogen fuel cell in Ballard, Canada, the solid oxide fuel cell in Siris, Britain, and the rapid air compressor in Switzerland. After years of development, it has built the world's largest R&D and manufacturing base for 20000 hydrogen fuel cell engines, A large number of breakthrough achievements with completely independent intellectual property rights have been made in the research, development and industrialization of the whole fuel cell industry chain, and multi scenario demonstration applications have been carried out, including in the field of construction machinery. It is worth mentioning that Weichai has jointly launched the world's first hydrogen fuel cell ore card of more than 200 tons with the upstream and downstream of the industrial chain.

According to the statistics of China Construction Machinery Industry Association, the number of major equipment of construction machinery in China will increase from 7.28 million in 2016 to 9.42 million in 2021, and the future demand will enter an era of renewal. How to seize the window period of new energy for construction machinery in reverse cycle? The strategic cooperation between Weichai Power and Xugong, Longgong and Lingong shows its solid pace.

From outside observation, Weichai has maintained stable growth in the face of adversity because it has kept up with the pace of industry adjustment at every step of its development.

A few days ago, the Central Economic Work Conference proposed that we will focus on expanding domestic demand next year, "accelerate the implementation of the Fourteenth Five Year Plan major project, and strengthen inter regional infrastructure connectivity." On December 14, the Central Committee of the Communist Party of China and the State Council issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), which clearly stated that "focusing on promoting the high-quality development of the manufacturing industry, building a manufacturing power, and guiding various high-quality resource elements to gather in the manufacturing industry", "accelerating the construction of transportation infrastructure"... Analysts believe that engineering machinery is the industry with the highest certainty of domestic demand growth among the sub industries of the equipment manufacturing industry, Directly benefit from the policy of expanding domestic demand.

From this point of view, the strategic cooperation between Weichai Power and XCMG, China Longgong and Lingong has undoubtedly stepped on the right step, reflecting Tan Xuguang's accurate grasp of shape and potential and his foresight of pre change.Editor/Xing Wentao