Accelerate the transformation of Foton Motors into the 2020 Strategy 2.0 era

"The Chinese team, come on! The Chinese team, come on!" The 2012 London Summer Olympics is in full swing on the British Peninsula. On July 28th, at the scene of the first match against Serbia in the Chinese Women's Volleyball Team, the cheers of a special team reverberated in the Earls Court Stadium, attracting the attention of countless Chinese and foreign audiences.

This team is organized by Foton Motor's Chinese women's volleyball team London Olympics. With cheering groups inside and outside the Olympic Games, cheering for the Chinese women’s volleyball team and collecting blessings, “Foton Motor” (Fukuda Motor) left a deeper impression on the minds of foreign friends from five continents and four oceans.

Moving from China to the world is the goal of many domestic auto companies, and Foton Motor is no exception. The year before last, the company proposed the 2020 strategy, plans to realize industrialization in five key countries, achieve breakthroughs in three developed automotive markets, and become the world's leading automaker.

However, the changes in the market have been turbulent. From a global perspective, in the post-financial crisis era, the global economy has not really come out of the trough, Europe has fallen into the quagmire of the debt crisis, and China's macroeconomic situation has declined. This is undoubtedly a severe challenge for commercial vehicle companies whose market trends are highly related to the domestic economic situation. In 2011, the country's total sales of automobiles reached 18,505,100 units, a year-on-year increase of 2.45%, and the growth rate of production and sales was the lowest in 13 years. Among them, commercial vehicles sold 4.0327 million vehicles, down 6.31% year-on-year.

For this situation, Futian Automobile, which is longer than strategic decision-making management, has anticipated in advance. In fact, after the 2020 strategy was put forward, the company’s management began to work harder to study and design the next decade of development. If we say that the 2020 strategy is a peak that needs to be conquered, then innovation and transformation are all the preparations and efforts to achieve the summit. From what to what to do, under the strong internal driving force, Foton Motor entered the 2020 Strategy 2.0 era with the key words of transformation and innovation.

Product Transformation - "World Standard, Mid-range Products"

A month ago, the Beijing Futian Daimler Automobile was formally put into operation and was marked with the first heavy-duty truck under the “Futian Daimler” logo. Foton Motor revealed that with the implementation of local heavy-duty engine production in 2013, its emission standards and power respectively reached Euro V and 490 horsepower. In the future, the Auman heavy truck that matches the engine will be marked on the door with the words "Mercedes-Benz Power", which will lay the foundation for entering the international market.

This is a huge contrast. Back in the 90s of the last century, it was hard to imagine that the companies that were still located in Shandong at the time were actually "new born calves are not afraid of tigers." They not only have the guts but also have the consciousness to join the auto industry. However, Fukuda did it. Since achieving light truck sales in China in 1999, this achievement has been maintained to this day, and it has won the global commercial vehicle sales championship in 2009.

Judging from the historical development context, the product transformation of Foton Motor has always been underway, and the success of each transformation is precisely based on an accurate judgment of the direction of China’s economic development. The discovery of infrastructure such as highways will greatly promote the development of the logistics industry. After the existence of heavy-duty trucks in the market, the company has also launched the Auman models in a timely manner. When it became aware that new energy vehicles were the future industry-led “green” prospects, Foton Motor was the first to commercialize hybrid buses in China.

Today, the Chinese economy is undergoing a profound transformation. The Central Economic Work Conference proposed that China's economy should be “stably progressing” in 2012. The most reliable way to achieve this is to increase consumption rather than investment. Many economists also suggested that we must not use a lot of investment to stimulate the economy. That would be like drinking and quenching thirst. The ability of Foton Motor to be good at studying the economic development trend and making transformational decisions based on this is consistent. Therefore, many people would not be surprised to read the contents of "transformation from investment products to consumer products" in the company's 2020 Strategy 2.0 version.

If the above product transformation is a horizontal dimension, then the shift from low-end to high-end products is a vertical change. However, the reference to "world standard, mid-range product" in version 2.0 will inevitably puzzle people. Is there a contradiction between this "middle end" and his "high end"? Zhao Yufeng, the manager of Futian Automotive's strategy and development department, said that the mid-range is a position that stands at the height of the global market and has a full understanding of commercial vehicle products. From the perspective of the international market, Mercedes-Benz, Volvo and Scania are the representatives. The products they launch are high-end, not only of the highest quality and performance, but also have a lot of "margin" in technology. Of course, the cost is also at a high level. The products produced by commercial vehicle companies in China, India, and Russia are in the low-end fields, and the prices are competitive, but there are deficiencies in terms of reliability and service life.

More precisely, "world standard, mid-range products" are cost-effective products that meet world standards. Technology meets world-class testing standards, and this is the stepping stone to Europe, the United States, Japan, and other developed markets. At the same time, it pursues the world's best cost-effective features and performance, eliminating redundant designs and becoming the standard quality of customer perception in target markets. product.

Obviously, in the global commercial vehicle market, the mid-end product is a promising "blue sea". Given the various twists and turns in the global economic development and the transformation of China's economic brewing growth pattern, the demand for this segment of the market is likely to increase in the future. Rapid growth and largest proportion. It is understood that currently Mercedes-Benz, Volvo and other companies are developing related models. This time, Chinese companies represented by Foton Motor are standing on the same starting line.

In the field of light trucks, Foton Motors launched in 2005 its mid- to high-end light-card AO Bell. In 2006, the high-end light-card Ouma, which was introduced in 2006, has seen an increase in the proportion of its light-duty truck products. The growth potential and development potential are huge. For example, in March of this year, Ao Ling and Ouma sold 10,566 vehicles and entered a high growth period. According to the plan, the sales volume of mid- to high-end light trucks of Foton Motor will account for 45% of the total sales this year and more than 50% next year, which will drive the company’s sales and profit growth.

Industrial Transformation - "Related Development, Intensive Management"

"Give me a fulcrum and I can pick up the whole earth." Perhaps the principle of leverage discovered by Archimedes, an ancient Greek scientist, more than 2,000 years ago, described the industrial transformation of Foton Motors' 2020 Strategy 2.0 version as appropriate. It is applied to the company. This fulcrum is the automobile and new energy automobile industry. It will bring together related construction machinery, new energy batteries, financial industry, modern logistics, and information technology service industries to form a trend of six swords.

Version 2.0 proposes that the six major industrial structures of Foton Motor are: Take the automobile and new energy vehicles as the basic subject, and adopt the principle of “associated expansion and intensive management” to form six major industrial structures that support each other, promote each other, and coordinate development. Among them, construction machinery is based on the development of medium-heavy-calorie-related business; new energy batteries are the core components of new energy vehicles; Foton Financial's marketing support for automotive business is very strong; logistics business is based on the vehicle's entire vehicle transportation while caring for the automotive business. Information technology service industry: Cars and new energy vehicles are used as carriers to realize intelligent, information, and networking of automobiles, greatly increase the proportion of information technology in the automotive business, and increase the premium price of automobiles.

Futian Automotive's industrial transformation design is clearly considered. As we all know, the competition in the automotive industry is very harsh both domestically and globally. There are even more sales and profits in the competition among automakers, and there are even potentials for growth, including capacity deployment, network construction, and future business growth. In reality, many decisions and actions, such as General Motors, Toyota, and the Volkswagen, are nothing but turning around competitive factors.

It must be acknowledged that due to the weak technical and product foundations and limited brand influence, Chinese auto companies are still trying their best to increase sales and expand the market. Can we be limited to this? The answer given by Foton is obviously negative. "On the basis of related to the main business, let other related industries exert the effect of 1+1>2." Zhao Yufeng explained the idea of ​​the company's industrial transformation.

The road pioneered by Foton Motor undoubtedly opened a new door for Chinese auto companies. In the 2.0 version of the company's 2020 strategy, through the industrial transformation, a comprehensive auto company with higher anti-risk capacity, stronger profitability, and more competitiveness is ready to go.

Market transformation - "going out" in stages

The transformation pursued by Foton Motor is not only reflected in both product and industry, but also includes the market. In the 2020 strategy, the company had put forward the "5+3+1" market layout. In the 2.0 release, Foton further refined this internationalization strategy: From 2011 to 2015, it will focus on promoting the industrialization of the Indian and Russian markets to establish benchmarks, and then replicate them to key markets such as Brazil, Indonesia, and Mexico; After 2016, it will break through the markets of the three developed countries of the European Union, Japan and South Korea, and North America.

Following the plan, Foton Motor’s “going out” strategy is being advanced step by step. In April this year, the governors and deputy governors of Russia’s Nizhny Novgorod region, as well as the heads of the Investment Policy Department, visited Futian Auto Beijing’s Auman Heavy Duty Truck Plant and a multi-purpose automobile plant, and signed letters of intent for cooperation with relevant departments in Beijing. Explore the possibility of Foton Motor building a plant in the local area. Two years ago, the company signed a memorandum of cooperation with the Moscow municipal government. Futian Automobile's European Automotive Division and Russia's Foton Motor Company were formally established. According to the memorandum of cooperation, Foton Motor plans to invest in a production base with an annual output of 100,000 cars, covering a full range of Futian products such as light trucks, China Cards, heavy trucks, big passengers, big VANs, small VANs, pickups, and SUVs.

As Wang Jinyu, General Manager of Foton Motors, stated, the company has plans and steps in the international market to follow the strategic intent of the planned idea, focusing on long-term deep-seated cultivation rather than speculative behavior in the short-term. At the end of June this year, Foton Motor announced that it will increase capital investment to Foton Motor India Manufacturing Co., Ltd. for approximately 478 million yuan, bringing the total investment to 1.724 billion yuan.

From the perspective of the number and density of multinational companies’ investment in Russia and India and the layout of their production capacity in recent years, it is not difficult to infer from outside that the two countries will play an engine role in the next round of economic and automotive market growth. It can be said that Fukuda has taken the lead in the planning of industrialization in domestic auto companies and has solidified the "going out" basis.

For Chinese auto companies, “going global” is not only a simple step to take a step. If you want to “stand firm” in the international market, you must have a competitive advantage. With product transformation, Foton Motor has no worries in this regard. In March 2008, Beijing Foton Cummins Engine Co., Ltd. was officially established. Its production of ISF2.8, 3.8 series of high-end engine in the domestic few opponents, more importantly, also large quantities of exports, has become the first choice of light manufacturers including the Russian GAZ, Mann, Brazil Volkswagen factory and South Korea's Daewoo passenger car, including the domestic light power. It can be imagined that Foton Motors, equipped with engines with such technological advantages, will be able to open up in the more stringent international markets such as emissions standards.

Foton Motor has a clear strategy and a firm pace. According to the 2020 Strategy Version 2.0, the company will achieve three milestone goals in phases. In 2013, it will form a “1+N” business management system. In 2016, commercial vehicles will become China’s leaders and passenger vehicles will achieve breakthroughs. In 2020, commercial vehicles will become Global breakthroughs in global leaders and passenger cars have finally led to the production and sales of over 4 million vehicles, sales revenue of over 500 billion yuan and a profit of 30 billion yuan.

At the same time, Foton Motor will also realize a mid-range product that includes shifting from low-end to high-end, creating world standards; from investment to consumption, from R&D and production investment products to consumer products; from manufacturing to service industry, and expansion of productive services Industry; from domestic to foreign countries, first developing countries, post-developed countries, expanding the global market; extending to the gold value chain, carrying out the "five strategic transformations" including the extension of the value chain.

For 16 years, down-to-earth, 16 years of good governance, Foton Motors has used wisdom, vision, determination, courage, self-confidence and hard work in exchange for numerous successful moments and the rapid progress of China's auto industry. In fact, people can expect more. After experiencing the blowout, low tide, glory and gloom of the Chinese auto market, this extraordinary auto company vowed to bring a successful road from big to strong and from China to the world for Chinese auto makers.

Standing on the starting point of the 16th anniversary, 2020, Foton Motor has once again set foot in stride and entered the 2.0 era of innovation and transformation.

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