Core competency powers leading truck maker ahead

　　China National Heavy-Duty Truck Group Co Ltd (CNHTC) has achieved dramatic growth in recent years.

　　 Statistics show that the company's output of heavy-duty trucks reached over 60,000 units in 2006, 15.5 times more than that of 2001.The firm demonstrated strong performance in the first half of this year, notching up sales of more than 52,000 units. The figure is projected to exceed 100,000 units for the year as a whole.

　　As the cradle of China's heavy-duty truck industry, CNHTC had its proudest moment when the first China-made truck with an eight-ton payload rolled off its production line in 1960.Evolving from Jinan Automobile Works based in East China's Shandong Province, the State-owned group company was among the elite of China's heavy-duty sector in the 1980s, with a total staff of more than 100,000 and hundreds of branches covering 14 provinces and cities across the country.Yet, the gigantic industrial player seemed to become clumsy when faced with a volatile market and was unable to respond immediately to market demand, so that it was soon mired in financial difficulties.This prompted the embattled company to initiate a three-year turnaround plan in 2001, when it was burdened with a heavy debt of 12.97 billion yuan (US$1.73 billion).

　　 The turnaround plan, focusing on innovation in corporate structure, management, technology and culture, spun off some facilities and laid off a part of the labor force, affecting about 50,000 workers.Through a series of comprehensive reforms and restructuring, CNHTC managed to pull itself out of its difficulties, retrieving its leading position in market share in the nation's heavy-duty truck industry in 2005."Every member of CNHTC has cherished a desire to contribute to the rise of China's auto industry," said Ma Jichun, chairman of the board of directors.

Technological edge

　　Looking back at the bumpy ride, executives of the company realized that weakness in research and development (R&D) capacity was one of the key factors that hindered the company's growth.

　　Technical staff were far less confident in technological innovation six years ago, preferring to depend on imported technologies instead. As a result, they hesitated to change even a single part of an imported auto model, recalled Zhu Ziquan, assistant to general manager of the company.Thus, finding a way to sharpen its technological edge has long been a major concern of the company.

　　In recent years, CNHTC has invested more than 5 billion yuan in technological innovation, reaping a rich harvest as a result.

　　Its technical team has made the leap from mere absorption of imported technologies to independent innovation and creation.CNHTC's product lineup has extended from 78 to 2,700 auto models, and the company has developed a portfolio of proprietary auto models such as Howo, Steyr King and Huanghe Prince.
The Howo series in particular, with more than 100 proprietary technologies, has attracted attention at home and abroad for its leading-edge technology.It witnessed impressive sales of 10,000 units in its debut year of 2005, a feat that surprised industry insiders.

　　CNHTC has consolidated its position as the country's leading heavy-duty truck maker with the development of the premium Howo series and is taking the lead in promoting technological progress in the industry. The firm has topped Chinese automakers in terms of patent number with more than 760 patents. During a public appraisal last year, jointly organized by China Enterprise Reform &Development Society and the national committee for accreditation of independent innovation, two arms of the State-owned Assets Supervision and Administration of the State Council, CNHTC was named one of the 10 best Chinese enterprises in terms of outstanding R&D capacity.

　　Backed by strong R&D, the company did not panic when two regular engine suppliers cut off supplies, but rather took the opportunity to extend its industrial chain to a new field: the heart of the automobile - its engine.Within just eight months, CNHTC launched its own proprietary improved engine. "Thanks to our strong technological support and prompt response capability, we have been able to achieve a breakthrough in such a short period," said Wang Wenyu, vice-manager of the company.In addition to an engine production base in Hangzhou, the company invested nearly 1 billion yuan in another engine production facility in Jinan, capital of Shandong Province, in 2006.

　　At present, the two production bases help CNHTC achieve an annual output of 200,000 auto engines.

Brand building

　　"Brand strategy is a lesson we learned in the market," said Wei Zhihai, another vice-manager of the company.To illustrate the point, he pointed out that CNHTC's heavy-duty truck sales were registered at 45,000 units in 2005, just 6,000 units less than the world's seventh automaker - MAN Group. Yet the difference in sales revenue between the companies was US$3 billion."It's brand value that resulted in the huge difference," he said.

　　The market preference for branded products prompted CNHTC's decision to build its own brand - SinoTruk.

　　Over years of continuing efforts, SinoTruk, now worth 3.19 billion yuan, has been listed as one of China's 500 most valuable brands for three consecutive years, according to the latest release by the World Brand Lab, a China-based brand research institute.Starting to venture into the international market in 2003, CNHTC exported more than 6,000 trucks to at least 50 countries and regions last year, an almost 150 percent jump over exports in 2003, gaining more than US$200 million in foreign trade revenue.

　　This year, exports are projected to exceed 15,000 units worth US$300 million.

　　CNHTC values its corporate responsibility. It set up a 10-million-yuan charity fund in May to help those in need and has sponsored a number of sports meets and energy-efficient projects in recent years.

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