China's two major independent brand enterprises in the equipment manufacturing industry—XCMG Group and Weichai Power—have formed a strong alliance, announcing that they will join hands to create world-class products.
On September 22, at XCMG headquarters, Wang Min, Chairman of Xuzhou Construction Machinery Group Co., Ltd., and Tan Xuguang, Chairman of Weichai Power Co., Ltd., jointly signed a strategic cooperation framework agreement. The two parties decided to carry out comprehensive cooperation in capital, supporting markets, technology R&D, overseas market development, and other aspects, leveraging industry advantage resources to jointly promote the revitalization of the national equipment manufacturing industry.
XCMG and Shandong Heavy Industry Sign Strategic Cooperation Framework Agreement
XCMG is a leading enterprise in China's construction machinery field. Since its establishment, it has always maintained the top position in China's construction machinery industry. It currently ranks 5th in the world construction machinery industry, with market shares of 9 categories of main machines and components ranking first in China. Among them, truck cranes and large-tonnage road rollers rank first in global sales. It exports tens of thousands of main machines annually to 169 countries and regions, and has become a large enterprise group with the largest scale, highest technical level, most complete product series, and largest export volume in China's construction machinery industry, possessing strong competitiveness, influence, and national strategic status.
Weichai Power, under Shandong Heavy Industry, is one of China's strongest comprehensive automotive and equipment manufacturing groups and has significant global influence. It possesses China's highest-quality commercial vehicle industry chain, with business covering complete vehicles and power systems (engines, transmissions, axles), and has become an international industrial equipment enterprise group with leading scale, advanced technology, and national strategic status.
XCMG and Weichai Power are both advantageous enterprises in their respective industries, and their main businesses are highly complementary. Earlier, senior executives from both sides exchanged visits and communications. After in-depth discussions and friendly consultations, XCMG and Shandong Heavy Industry unanimously agreed to establish a comprehensive strategic cooperative relationship.
Prior to this, XCMG and Weichai Power had already established a good supporting relationship. The two sides have a cooperation history of more than 20 years. Currently, Weichai Power's engines hold a high supporting share in XCMG's earthmoving machinery, and have also formed supporting relationships in the crane and road machinery fields. At the same time, XCMG has supporting relationships with Weichai Power's Hande Axle, Fast Gear, and Shaanxi Heavy Duty Truck.
XCMG has established an industry-leading industrial advantage in the field of engineering hydraulic components. In the previous two years, it acquired two technologically advanced hydraulic system component companies in Europe and established a European technology R&D center in 2013. Weichai Power acquired the Linde Hydraulics business under Germany's KION Group, mastering the core technology of hydraulic components for construction machinery, which is a rare technical resource for construction machinery enterprises. Currently, Weichai Power is actively planning to build a plant in China. The two sides have broad cooperation space in expanding product scale, reducing product costs, and achieving localization.
According to the agreement, the two sides will conduct comprehensive cooperation in multiple fields including capital operations, product development, and market supporting, covering multiple product series under Weichai Power such as hydraulics, engines, transmissions, and axles. XCMG will gain Weichai Power's new technical support advantages in power transmission systems and market support advantages, comprehensively enhancing competitiveness. Weichai Power's supporting share in XCMG products will further increase. The two sides will also strengthen high-level mutual visits and have established a chairman exchange and visit mechanism.
Both sides' senior management teams attach great importance to the signing of this strategic cooperation agreement and are unanimously optimistic about it. Tan Xuguang, Chairman of Weichai Power, stated that the strong alliance between two heavyweight enterprises, Weichai Power and XCMG, will have an important impact on the construction machinery field and boost the takeoff of the national equipment manufacturing industry.
Currently, XCMG is in the stage of transforming from a production-oriented manufacturing enterprise in construction machinery to a service-oriented manufacturing enterprise, and is expanding into upstream and downstream areas of the industrial chain such as information, finance, modern logistics, and remanufacturing. It has established an "international, world-class" corporate development positioning. While consolidating its traditional advantageous sectors such as lifting machinery, road machinery, earthmoving machinery, piling machinery, and basic components, product sectors such as concrete machinery, excavation machinery, sanitation machinery, and heavy trucks are also growing rapidly. This strategic cooperation with Weichai will add new development momentum for XCMG in supporting the development of main machines with core components, especially in energy-saving emissions and technological upgrading of transmission technology, as well as stimulating the internal vitality of the enterprise.
For Weichai Power, cooperation with XCMG will boost the enterprise's transformation and upgrading. With the adjustment of product strategy, next, Weichai Power will focus more on strategic markets such as construction machinery, buses, and agricultural equipment, thereby maintaining long-term stable development of the engine business. XCMG will provide a good platform for Weichai Power's off-road engine development. Currently, Weichai Power has built a 2L-13L full-series full-domain engine platform, and its products fully meet the needs of XCMG's various product series. Leveraging its dominant position in the heavy truck industry, Weichai Power, whose engine technology has reached National IV and National V emission standards, is full of confidence in emission upgrades in the construction machinery field.
Wang Min, Chairman of XCMG, stated that the company has maintained a good cooperative relationship with Weichai Power for many years, with high compatibility in both products and markets. The signing of this strategic cooperation agreement will provide broad space for future market development and product R&D for both sides. And we believe that the close combination of two national brands will surely spark something extraordinary in China's equipment manufacturing industry.
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