Dongfeng's "Self-independence": Integration and Innovation in the New Era
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Independent innovation is its reliable guarantee for a foothold in the world. Further enhancing the ability of independent innovation and accelerating the construction of independent brands is the most important aspect of Dongfeng.
On September 9, 2013, China Business Network, as participating media, participated in a three-day “Walking into a New State-owned Enterprise†online media event organised by the State Council Information Office and the SASAC News Center, and visited Dongfeng Motor Company in Wuhan. The three major production bases in Shiyan and Xiangyang have learned in detail the innovative new achievements of the development and transformation process of Dongfeng Re-Enterprise.
In fact, since its inception, Dongfeng has experienced the baptism of global competition. This has also brought transient transformational pains to the Dongfeng. Today, through the transformation of institutional mechanisms, Dongfeng has established a more standardized parent and subsidiary company operating mechanism and took the lead in realizing it. The overall overseas listing, the first to establish a standardized board of directors in the state-owned enterprises, and improve the company's corporate governance structure.
Up to now, Dongfeng Corporation has begun to promote the autonomous passenger vehicle business across the board, presenting a brand-new posture of both merchants and operators. Then, in the next “autonomy and integration†stage, what kind of innovation and change does Zhu Fushou, the general manager of Dongfeng, need?
Joint venture feeding
It is hard to imagine that the modern passenger car production mode will be stationed in the assembly shop of Dongfeng Commercial Vehicle Co., Ltd., which is located in Shiyan, accustomed to the busy domestic workers in other domestic commercial vehicle assembly shops. Here, the young assembler is still familiar with the scene of sweating, but the shelves on both sides of the assembly line are not visible. They become a small car that goes silently along the production line.
According to the workshop narrator, these cars are called "AGV cars." The so-called AGV trolley actually refers to an unattended automatic material transport vehicle. As long as electromagnetic induction tracks are laid on the floor of the workshop, the trolley will automatically arrive at the designated place for loading, feeding, and discharging. The reporter noticed that such an AGV car is almost everywhere in the assembly shop of Dongfeng Nissan Passenger Car Company in Huadu, Guangzhou.
“Dongfeng Commercial Vehicle Assembly Plant, as a modern production workshop, naturally draws on some modern production methods.†An executive from Dongfeng Commercial Vehicle Co., Ltd. beside him said that, for example, the application of an AGV trolley can make the assembly shop invisible. Large areas of materials are piled up, and workers can't see the material being transported. This not only saves space in the workshop, but also saves the labor needed to transport materials.
In fact, the application of the AGV material trolley on the Dongfeng commercial vehicle production line is only a microcosm of the “taking-in†of the Dongfeng commercial vehicle in the joint venture system.
“Our current location is a new general assembly plant. Our goal is to establish it as a benchmarking facility for QCD's global competitiveness. The quality, cost, and delivery capabilities of the company will mark the world's advanced level of a modern factory.†Huang Gang, General Manager of Vehicle Co., Ltd. believes that in the Dongfeng Limited joint venture system, although the joint venture company Nissan has no commercial vehicle business experience and product technology, Dongfeng Commercial Vehicles first absorbed Nissan’s management philosophy, management methods and management. Tools have made their management capabilities have been greatly improved.
On this basis, Dongfeng Commercial Vehicle also created some advanced production, management and marketing models. “For example, we face the market’s iron triangle mechanism, the N+3 operating mechanism to improve market responsiveness, etc. There is also a very important progress in the entire team. Our team has both internationalized in the past decade.†The study and experience have made our team more mature, more professional, more international and market-oriented,†said Huang Gang.
Thanks to this, after ten years of joint venture operation, Dongfeng Commercial Vehicles has also made considerable progress in the market. It is understood that Dongfeng Commercial Vehicle is currently the largest leading manufacturer of domestic heavy truck sales. In the past nine years, it was ranked first in the heavy truck industry. In 2012, the sales volume of heavy-duty trucks over 6 tons was 179,000 units, with a market share of 19%, ranking first.
“At present, Dongfeng Commercial Vehicles has more than 400 dealers nationwide and 757 service stations. In the 9.6 million square kilometers of land, there is a service station for Dongfeng Commercial Vehicles within a 60-kilometre transport radius,†said Huang Gang. . According to the development plan of Dongfeng Commercial Vehicles, in the mid- and heavy-duty commercial vehicle industry, Dongfeng Commercial Vehicles will go overseas on a leading domestic basis and build China's Dongfeng brand into a globally-renowned brand.
Institutional innovation
“We are talking about the limitations of our own brands. In fact, the entire industry has neglected the fact that commercial vehicles have been the mainstay of national self-development since 1953, but the outside world and the media have paid little attention to commercial vehicles. In fact, the technical content of commercial vehicles in foreign countries The value content is far greater than the average passenger car, said Zhu Fushou, general manager of Dongfeng Motor Corporation.
In fact, this is indeed the case. For Dongfeng Motor Company, the story of its entrepreneurship is that it started with commercial vehicles. Its reputation is also attributed to commercial vehicles. Today, there are more than 100,000 employees involved in commercial vehicles. Commercial vehicles are the starting point for their development. Basically, in a sense, it can be said that "commercial vehicles are prosperous, and commercial vehicles are in decline," and the development of commercial vehicles is the basis of Dongfeng Group.
From the perspective of the development of Dongfeng, commercial vehicles are indeed the root of Dongfeng: When Dongfeng was founded in Shiyan in 1969, it was mainly a military vehicle and off-road vehicle manufacturer. It was only in 1978 that it entered the field of civilian vehicles; from 1981 By 1993, Dongfeng entered a period of rapid growth in the commercial vehicle sector. From 1994 to 2000, Dongfeng, like the national economic restructuring reform, entered a relatively difficult stage. At this stage, Dongfeng entered the field of cars. At the same time, there was a downturn in the commercial vehicle market, which made Dongfeng Company very difficult at the time. From 1994 to 1997, Dongfeng had a total loss. Before and after the year 2000, Chairman Jiang led various ministries and commissions of the central government to inspect the east wind and gave great encouragement and support to the east wind.
Since then, it has experienced the “start-up period†and “difficult period†of the east wind and has gradually entered the leapfrog development stage. During this process, Dongfeng commercial vehicles also played a significant role. “In the 10 years from 2001 to 2010, it was the stage where Dongfeng stepped toward opening up and cooperation. At this time, we took out more than 70% of Dongfeng’s commercial vehicle assets and established a joint venture with Nissan to establish Dongfeng Motor Co., Ltd. and Dongfeng Company at the same time. The entire 80% of its main business assets are listed overseas and listed in Hong Kong at the end of 2005, said Liao Zhenbo, director of strategic planning at Dongfeng.
According to its introduction, since 2001, Dongfeng has pushed the modern enterprise system to the standardization stage, continued to deepen and improve the reform of the company's system and mechanism, established and improved the corporate governance structure of parent-subsidiary companies, strengthened internal management, and improved the secondary units under centralized control. The self-management model adheres to the reform of the cadres, employment, and distribution system, and comprehensively innovates the operating mechanism of the company, establishes a standardized company management system that revolves around the market and benefits, conforms to the modern enterprise system, and strengthens the basic management requirements. In April 2011, based on the need to deepen the reform of state-owned enterprises and improve their own institutional mechanisms, Dongfeng Company initiated the construction of a standardized board of directors.
During this period, in order to reverse the development difficulties, Dongfeng has also established the concept of “integration and development, and competition and cooperationâ€. This is the “East Wind Model†widely known in the industry. The core of this idea is to seek cooperation with large transnational corporations, use comparative advantages through cooperation, bring in necessary resources, seek mutual benefits, mutual benefits, and common development through cooperation, and ultimately increase competitiveness. Through the successive cooperation with Hyundai Kia Korea, the PSA Peugeot Citroen Group, Honda Japan, and Nissan of Japan, the company has created conditions for “building a million-class automotive companyâ€.
Facts have proved that the development of Dongfeng has been very fruitful. According to statistics from Dongfeng Company, by 2013, the total assets of Dongfeng had reached 137.7 billion, the number of employees was 152,700, and there were 137 parent companies and subsidiaries. In the past ten years, Dongfeng’s performance has also increased from the production and sales volume of 415,000 vehicles in 2002 to 3,088,500 units in 2012. Operating income has also increased from 70.48 billion yuan in 2002 to 388.4 billion yuan in 2012.
Until now, Dongfeng has taken new steps on the road to internationalization. Foreign cooperation has begun to develop in the direction of controlling key technologies and key resources. In September 2012, Dongfeng acquired a 70% stake in Swedish company T, which enabled Dongfeng to enter the international advanced level in the commercialization of electronic control of complete vehicles and powertrains. Dongfeng’s first overseas R&D base officially settled in Sweden. In October, Dongfeng signed a contract with Getrak in Germany and will invest 120 million euros to establish a new plant for dual clutch transmissions. In November, Dongfeng and German Smith jointly invested 600 million yuan to establish the Dongfeng Smith semi-trailer plant.
The soon-to-be established Dongfeng Commercial Vehicle Co., Ltd. is completely different from the previous joint venture model. This cooperation is a "strategic alliance with capital as its link." Dongfeng will repurchase Dongfeng’s limited assets of medium- and heavy-duty commercial vehicles. Volvo will invest in cash. The new Dongfeng Commercial Vehicle Company was jointly established. The number of joint ventures accounted for 55% of the Middle East, Volvo held 45% of the shares, the chairman and general manager were all served by Dongfeng, and Volvo served as vice chairman.
Li Rongrong, former director of the State-owned Assets Supervision and Administration Commission of the State Council, also affirmed Dongfeng’s diversified international cooperation. “There is a big gap between China’s auto industry and the world’s advanced level. Restructuring with multinational companies is the only way for the Chinese auto industry, and Dongfeng’s international cooperation. Fully reflects this requirement."
Autonomous integration
In the previous decade, Dongfeng had a large-scale joint venture with an international giant. “Going out, please come in†has been completed. The next step is how to maintain the maximum benefit of the joint venture company. Making Dongfeng Passenger Vehicles and Dongfeng Commercial Vehicles “go in tandem†and Dongfeng’s own brand “hundred flowers blossoming†has always been a firm belief of the Dongfeng Company's managers in practicing the industry to serve the country.
In fact, from the 90s of last century, Dongfeng began to accumulate experience in independent Cheng Yong and developed the Dongfeng mini-car prince. In 1992, it first attempted to develop the AF Little Prince mini car, which was Dongfeng’s first car. From 2002 to 2010, it laid the foundation for autonomous passenger vehicles through open cooperation. It mainly draws on the technology of its partners, focuses on the independent development and construction of Dongfeng, integrates various social resources, and rapidly develops its own brand of passenger vehicles. Three vehicle brands.
Of course, before Dongfeng officially launched its own-brand passenger car, the situation is that Dongfeng may be earlier than FAW and SAIC in terms of independent research and development. But in the market, FAW Pentium and SAIC Roewe have earned more or less. Profits, while Dongfeng is still working hard.
“In terms of autonomous passenger vehicles, Dongfeng began to do it on the 9th, 15th, and 11th, but when it was really started, we strategically planned our passenger vehicle strategy in 2005.†Zhu Fushou stated frankly. . “In Dongfeng, how to define the various passenger vehicle business units is a problem.†Zhu Fushou realized that this was a feature of Dongfeng Motors. Dongfeng’s autonomous passenger vehicles needed to have a top-level design for themselves.
In July 2005, Dongfeng's own brand passenger car project preparation group was formally established. In July 2007, the first phase of the Dongfeng Passenger Vehicle Wuhan Plant was laid. The first phase of the project will complete the annual production capacity of 160,000 vehicles. After the completion of the second phase of the project, the total annual production capacity will reach 330,000. Based on the foundation of Dongfeng's joint venture and cooperation accumulated over the years, and combined with the automotive industry and Dongfeng's reality, Dongfeng officially announced its own brand "Dry" D300 plan on December 10, 2011. According to the plan, Dongfeng's own-brand passenger car business will be promoted mainly from the three fronts of the Dongfeng brand passenger vehicle business, the Greater China brand passenger vehicle and joint venture autonomous passenger vehicles, and jointly support 2016 Dongfeng's total sales of its own brand to 3 million. The goal of the vehicle.
In this process, "joint development" has become the path of Dongfeng's own brand. “We also call it 'composite development', Dongfeng headquarters has a technology research and development center, and each of its joint ventures also has its own R&D center. The communication between the various technology centers is very full.†Wen Development stated that, for example, it is an independent brand. We will draw some experienced technical personnel from the joint venture company to do research and development of our own brand. The company has accumulated 13 years of development experience in Shenlong Automobile and led the domestic development of the Peugeot 307 and other domestic models.
Of course, not only is the concept open for the use of talents, but Dongfeng also actively uses the joint venture's technology system in its own brand technical resources. For example, in terms of styling, Dongfeng's first self-owned sedan is designed by Dongfeng and internationally renowned automobile designer Giugiaro, while the bodywork is jointly developed by Dongfeng Technology Center and IDG (Italy). In the supporting system, the characteristics of “joint development†are even more obvious. For example, the engine is a PSA engine, and the transmission is a Japanese Aisin automatic transmission and a French MA manual transmission.
With the Dongfeng "great synergy" strategy as a turning point, Dongfeng's "autonomy" strategy has begun to be released intensively. The "Dasha vehicle," "large commercial vehicle," and "large parts and components" are interlinked. In "large autonomy" strategic planning. In April 2013, Dongfeng re-sorted self-owned passenger vehicle brands from the height of top-level design. Through the planning of the positioning of various sub-brands, the sub-brands from the competition relationship to a large synergies, formed a Dongfeng Fengshen, Dongfeng popular, Dongfeng. The overall layout of demeanor.
"On the speed of independent innovation, Dongfeng's guiding ideology is independent innovation, key leapfrogging, market orientation, and utilization of resources. In the process of improving Dongfeng's core R&D capabilities, we emphasize the need to cultivate project management capabilities, performance development capabilities, and simulation development capabilities. , to create and enhance the core competitiveness." Zhu Fushou said. According to its introduction, Dongfeng’s R&D funding has been increasing year by year. Accumulated R&D expenditures totaled 18.7 billion in the past five years. R&D spending alone reached 5.46 billion in 2012. In terms of R&D teams, Dongfeng has a total of 46,660 people, of whom 4% are high-end, 1573 are people, and 12,625 people are in the middle.
With the implementation of the "grand autonomy" strategy, Dongfeng's autonomous passenger car business has developed rapidly. In 2012, Dongfeng’s own brand sales achieved 1.12 million units. From January to June this year, Dongfeng’s own-brand vehicles sold a total of 660,500 vehicles, an increase of 10.46% year-on-year. Among them, the sales of self-owned brand passenger cars were 303,800, an increase of 27.46% year-on-year, and 14.26% higher than the industry.
In fact, during the 44-year development experienced by Dongfeng, all its actions were centered on a “Dream of the Eastâ€: “A century-long development of sustainable development, an internationalization oriented to the world, and an autonomy in opening up. The development of the east wind. "In the future, Dongfeng will continue to increase the scale of production and sales and operating quality, to achieve the dream of the automotive industry, the Chinese nation's great rejuvenation of the "Chinese dream" to make greater efforts. Dongfeng is still on the road.