Weichai Power: The policy is too loose to promote the survival of the fittest

Qian Cheng, Vice President of Weichai Power Co., Ltd., stated at the 2009 Asia Manufacturing Forum in October 26th that the country’s policy on emission reduction is too loose to promote the survival of the fittest.

He said that there is a big gap between the emission regulations implemented in July 2008 and the current European and American regulations. Therefore, at present, there are not only large gaps in emission regulations, but also the implementation schedule is not clear. At the time of implementation, the supervision is not strict enough, making it difficult for enterprises to make some preparations in advance for the technology, so it cannot promote the survival of the fittest and further concentrate the industry. Therefore, the suggestion here is that there should be stricter emission regulations. Of course, the policy has now come out, but what kind of laws and regulations are still worth studying. Air pollution, global warming, economics and energy security must be chosen among the three.

Qian Cheng: "Industrialization of New Energy Commercial Vehicles, Opportunities for Automotive Industry"

Looking back at the development of the manufacturing industry, in fact, the development of the manufacturing industry has evolved from handicraft production in Europe to large-scale automobile production represented by Ford of the United States, and lean production represented by Japan. The United States has become a major force in the economy.

Looking back at history, a manufacturing industry must invent its own things to increase the efficiency of manufacturing. Today, although China's manufacturing industry has developed, it has reached the world's largest scale in many fields. However, we recalled that we have not yet seen, or have not yet concluded, what the Chinese manufacturing industry actually invented.

From handicraft production to large-scale production, to lean production, how to create from China to China, this is a topic. In addition, we can also see from the technological development of products, there are two examples, such as the digitization of home appliances and the popularity of mobile communications. After the war, Japan was in a leading position in home appliances. Why did South Korea come from behind? The digitalization of home appliances provided him with such an opportunity. The application of mobile communications in China has become popular because China does not have fixed telephones like foreign countries and has established such a network. Without such a network, it has stepped into mobile communications. As a result, it is more popular than the United States in terms of mobile communications. This is the progress of technology that allows a country's industry to come from behind. Therefore, in connection with these two aspects, in the course of the financial crisis, in the face of new energy challenges and rapid growth, China's energy automobile companies have what opportunities, as companies and governments should adopt what kind of strategy.

Only innovation and invention can create a strong manufacturing industry

Why do we have to talk about new energy vehicles? This is the statistics of China's internal combustion engines in 2008. In 2008, the import and production of petroleum was basically the same, and the consumption of commodity diesel was almost twice the consumption of commercial gasoline. Most of the diesel fuel is used in commercial vehicles, industrial machinery and agricultural machinery. Commercial vehicles and non-road vehicles account for two-thirds of our entire internal combustion engine, and in this one-third, basically the consumption of cars, and about two-thirds of the cars are joint ventures and foreign production. Its level Having reached O4 or O5, there is not much room for improvement. Through truly independent innovation, we should develop low-carbon economy and reduce emissions. We should focus on the consumption of commercial vehicles and diesel fuel.

The Importance and Practical Significance of Industrialization of New Energy Commercial Vehicles

The industrialization of new energy commercial vehicles is more important and realistic for China's automobile manufacturing industry. The first reason is energy conservation, emission reduction and safety. For example, for a heavy truck, its fuel consumption per 100 kilometers is 35 liters, and a family car is generally 7 liters, which is 5 times. The heavy trucks travel around 150,000 kilometers a year, and the family car is 15,000, which is 10 times. Therefore, the emission of a heavy truck is 50 times that of a car in terms of carbon emissions. Weichai produced 200,000 engines for heavy trucks, and 100,000 were equivalent to 5 million. Of course, not every engine is used on heavy trucks on highways. Many of them are used on earthworks, so they have not run for a year. So many kilometers. If it is generally used in tractors, it is equivalent to the emission of 5 million cars in China. This is a quantitative understanding for everyone.

The second factor is the manufacturing of commercial vehicles, which has become the largest in the world and the fastest growing. Because in the past financial crisis, we were not affected by too many financial crises because of the country’s 4 trillion pulling. Because of the financial crisis in the United States, it is expected that there will not be a fast recovery market in Europe.

At present, this is the Asian market. This is China's market. China's commercial vehicles are a production equipment. From the viewpoint of fuel consumption and value, they are heavy and medium-sized trucks, and light trucks account for a relatively large amount.

At present, we are the largest in terms of global production scale and the fastest growing. Looking back at the past 20 years, before 2000, especially when we saw heavy trucks, as an important equipment for the production of equipment, especially for infrastructure construction, it was still under 50,000 units before 2000. After 2000, it achieved rapid growth. It took about five years to catch up with the markets in Europe and North America. Last year it reached 540,000, which is equivalent to Europe and North America. This year it will remain at 50-600,000 units. So, the second factor is that it is the largest and fastest growing in the world.

Third, for new energy sources, this technology is relatively low cost. Just as the cost of implementing trucks is relatively low, the cost of implementing new energy technologies is also lower than in the West. At the same time, the effect is significant. Why? Because our oil prices are basically the same as international. Looking at the operating cost of a heavy-duty truck throughout its life cycle, depreciation and maintenance of the artificial fuel and vehicle in the US and Europe account for 1/3 each, and fuel in China accounts for more than half, because our labor costs are relatively high. Less, the cost of the entire vehicle is also relatively small. Therefore, if we achieve energy savings, our economic effect is the most significant.

Therefore, combining the above reasons, our challenge in new energy technologies is, first of all, a revolution in new energy technologies. It is a manufacturing mall for global engines and power systems. We are back at the same starting point, and everyone faces the same new problems. . Second, China has the largest industry in the world. The huge demand for energy and the pressure for reducing emissions, as well as the need to reduce operating costs, will make it possible for China to become the first market for commercial-driven new energy commercial vehicles. It is the result of our analysis. At the same time, it has given birth to a world-leading new energy commercial vehicle industry, which has reached the scale of the world. Third, what are we currently? Because the domestic traditional technology is relatively weak, where is the path of new energy? It can not do without traditional technology, our traditional technology is weak, our industry is more dispersed, so our integrated development capabilities Relatively poor. The lack of system providers, as well as marketization and industrialization, we face great challenges. There is a great deal of conflict between demand and attainment.

Weichai's strategy in new energy

Therefore, currently leading foreign companies, in the field of new energy technologies, commercial vehicle power system, he put the Chinese market as a first pilot plant. How should we respond to the domestic commercial trial manufacturing industry? I have expressed some opinions from the perspective of the company.

First, talk about Weichai Power. Weichai Power is because in the past 10 years, the rapid development of China's economy has given companies a very good opportunity for growth. Our current production of high-power engines, about 300,000 units a year, has already ranked first in the world. The world's leading heavy-duty commercial vehicles or construction machinery companies and construction machinery equipment groups can generally achieve 100,000 units. We can now achieve 300,000 units, which is benefited from China's huge market.

Similarly, the Fast Transmission in our group has achieved a production of more than 500,000 units a year, which is the first and second place in the world. It is the American Eaton Corporation and European Fortune (transliteration) company. Even more. And our axle is the first one. This is mainly to provide the military. And our heavy truck is the fourth in China. Weichai has occupied a very important position in the industry in the power system. In particular, after 2004, the concept of powertrain was first proposed, and resources for engines and axles were formed through integration and acquisition. Recently we matched the light power assembly and we achieved a 10% fuel saving effect.

In 2008, the heavy truck engine was 190,000 units, accounting for 36% of the global market share, ranking first. In heavy industrial machines, which accounted for 81% of the market, our engines accounted for 80% of the market share in Yongshang Shichang, while we evoked electricity generation and bus business. Below, what is our new energy direction? This picture is from 1930 to our annual oil products. Experts predict oil and gas production capacity as fossils, by 2010 or 2015, or 2020, or some One year will reach a peak, after this peak, this production capacity will gradually become effective. As mining and exploration costs increase, it will decrease. In this way, a problem of energy crisis was raised, but there were some misunderstandings in the early response to the energy crisis. If everyone sees that energy is decreasing, it is also a very slow process, because from the exploration and production of oil to the smelting of petroleum, it has a large amount of fixed asset investment and precipitation. This process now experts predict that at least 50 Years, even 80 years. Therefore, from this point of view, what we need at present is energy-saving and emission-reduction technologies rather than finding a new energy source that can completely replace oil. The market is very good and we can accept it.

In the future, from the perspective of the internal combustion engine, mainstream technologies for industrialization can be formed. At present, it should be an oil-gas hybrid project that can achieve fuel economy. This is the focus of current development. However, we do not overlook the increase in traditional internal combustion engines. In this area we believe that we can increase at least 20% through optimization of engines and conventional systems, development of core technologies, and research on alternative fuels. On this basis, through the development of the powertrain, we have achieved the integration of diesel and electric power and eventually developed into a zero-emission, pure electric vehicle. There is room for nearly 30% improvement. Therefore, the entire strategy for achieving new energy should be a variety of technological approaches. While developing new energy technologies, we must not overlook the upgrading of traditional technologies. This is an overall development strategy for enterprises and finally achieves the goal of power. The overall strategy of the company is to use power as its core, and to use its huge industrial synergies to share technologies, shorten development time, and mass produce key components.

As for the development strategy of new energy for enterprises, I give an example of General Motors and Toyota Motor. In the early 1990s, General Motors pioneered the introduction of a purely electric vehicle, but later discovered that the technology was not mature, and by the end of the 1990s it abandoned the development of electric vehicles. Immediately after the SUV market was hot, it was attracted by short-term profits. It completely ignored the development of new energy technologies. When it came to the extreme, it withdrew from such models as Hummer. When they introduced new energy technologies in 2000, they were eager to achieve success. They took a bet on fuel cells, and the products they developed could not be industrialized. There was a lot of investment. The technology was still there, but there was no way to recover them. There are many reasons why GM has encountered the current situation. This is one of the reasons.

At present, when hybrid power is formed industrially, he has to introduce a large amount of technology from Japan, including obtaining some technology licenses from Toyota's suppliers. In contrast, in the mid-1990s, when Toyota introduced a hybrid car that did not cause much sensation in the market, it continued to improve in the same direction, and its performance increased continuously. At present, it exceeds the output of millions and becomes The world leader in new energy vehicles.

The enlightenment it gives us is that this company, like GM, can't focus on long-term development. Why can Toyota Motor Corporation focus on long-term development and gradually increase technology? This is related to the company's structure, as an example of an Anglo-American listing. The company's structure, the company's leadership was forced to quarterly performance, half-year performance, one-year performance is the main, and in the case of Japan's financial structure, capital structure, he makes the company's development, can develop a relatively long-term The development strategy.

Here, our economists here can take a good look at how our Chinese company, as a private enterprise, as a state-owned enterprise, and as a listed company, is how it is positioned. How can it be able to formulate a solid current and long-term future? This is an example of the development benefits.

The role of government in promoting new energy industrialization

The improvement of the technical level of commercial vehicles is relatively slow. Its product cycle can reach 20 years and 30 years. It is mainly driven by the government's laws and regulations to gradually increase. If the government’s laws and regulations are relatively stringent and commercial vehicle technology is raised too fast, we have advanced the product’s technological level in terms of product prices. For example, currently 200,000 trucks, Chinese companies can now produce 60 In case of a truck. However, no one is buying it now. Why? Because the government's regulations do not include emission, safety, and reliability, the entire logistics system does not meet this requirement.

In the past, the regulations that were enacted meant that if we made regulations too stringent, China’s manufacturing industry would not be able to meet this requirement, would it not give our competitors foreign companies a lot of competitive advantages? So, because of this, We are concerned that, in fact, the requirements of laws and regulations, we are not strict enough from the corporate point of view, and should be more stringent. This makes it difficult for companies to operate in an environment, but overall it makes our manufacturing industry more Competitiveness.

In particular, from emissions, we can see that there is a big gap between the emission regulations that were achieved in July 2008 and the current European and American regulations. Therefore, at present, there are not only large gaps in emission regulations, but also the implementation schedule is not clear. At the time of implementation, the supervision is not strict enough, making it difficult for enterprises to make some preparations in advance for the technology, so it cannot promote the survival of the fittest and further concentrate the industry. Therefore, the suggestion here is that there should be stricter emission regulations. Of course, the policy has now come out, but what kind of laws and regulations are still worth studying. Air pollution, global warming, economics and energy security must be chosen among the three.

Finally, I put forward the conclusions and recommendations. First, the financial crisis and the rapid development of China's economy have enabled China to develop the world's largest commercial vehicle industry. The recovery of the financial crisis and the revolution in new energy technologies will give the commercial automobile industry an opportunity to bring about industrial upgrading and technological leapfrog development. At this meeting, scholars have put forward the same view.

Second, in the past, the national high-tech plan laid a good foundation for new energy automotive technologies, and many fields have reached the world's advanced level. In the next step, the government should formulate more stringent emission regulations and implement them on time, and formulate market mechanism-based incentive policies to promote the process of industrialization of new energy technologies that are mainly enterprises. In terms of the development of basic technologies and sharing technologies, national policies are very effective. Enterprises should be more effective in promoting the overall application and industrialization of technologies. However, the government must be able to formulate a market-based incentive policy.

Third, the corporate social responsibility and the long-term sustainable development of the company are essentially the same. If we combine the immediate interests and long-term development of the company, we must study and solve the corporate governance structure. As a developing country's manufacturing industry, while developing new energy products, we must not overlook the gaps in traditional technologies, we must innovate for the market, do not innovate for innovation, and do not rush to achieve success.

Finally, whether it is policies to stimulate the economy or policies to promote new energy technologies, it can only play a role in starting. The real driving force for the continued development of the industry lies in the market itself. The competition between new energy and traditional energy, the new system of technological development itself and the contest of sedimentation assets will make this process more and more complicated and long.

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