On September 22, 2014, Weichai Power , a subsidiary of Shandong Heavy Industries, signed a strategic cooperation agreement with XCMG . The two parties decided to carry out comprehensive cooperation in various areas such as the capital sector, supporting markets, technology research and development, and overseas market development. "Under the new normal" grasp market opportunities to achieve a win-win situation. For the powerful combination of two heavyweight companies, industry experts read out more connotations and heavier weights. Weichai Power, which plays an important role in the Chinese manufacturing arena, collaborated with XCMG to demonstrate the status of the company. Strategic vision. Previously, two companies dreaming of making a dream come true with their two local brands. Different from superstitious foreign brands, while promoting the development of enterprises to be more stable and sustainable, the two companies will jointly choose local brands for strategic cooperation, which will help push the national equipment manufacturing industry to a new level. This is the case of the two self-owned brand enterprises. History. Grasp the opportunity in the "new normal" Weichai Power and XCMG’s joint efforts have attracted much attention in the industry. The former is one of the most powerful automobile and equipment manufacturing groups in China and has significant influence in the world. It owns China's highest quality commercial vehicle complete industrial chain, and its business covers entire vehicles and power systems. It has become a leader in scale and advanced technology. And the international strategic industrial equipment enterprise group. The latter is a leading enterprise in the field of construction machinery in China. Since its establishment, it has always maintained the top position in the Chinese construction machinery industry. Currently, it ranks 5th in the world's construction machinery industry and 3rd in the China's machinery industry 100. It is the construction machinery industry in China. The largest enterprise group with the largest scale, the highest technical level, the most complete product series, the largest export volume, and the highly competitive, influential and national strategic position. Such two companies can work together to be a combination of strengths and strengths and complement each other - both are superior enterprises in their respective industries, and their main businesses are highly complementary. Under the new normal, where industry competition is more intense and rules are more fair, Weichai Power has exchanged visits and exchanges with high-level officials of Xugong Group. After in-depth discussions and friendly consultations, the two sides agreed to establish a comprehensive strategic cooperative relationship and jointly grasp market opportunities under the "new normal" of cooperation and complementarity. In fact, prior to this, Xugong Group and Weichai Power had established a good supporting relationship. The two sides have had more than 20 years of cooperation history. At present, Weichai Power holds more than 80% of the shares in Xugong's scraper machinery, and forms a supporting area in the field of cranes and road rollers. At the same time, XCMG and Weichai Power's Hande Axle, Fast , and Shaanxi Heavy Duty have a good matching relationship. With a long-term perspective, the cooperation space between the two parties is still open. Weichai Power acquired the Linde Hydraulics business under the German KION Group and mastered the core hydraulic technology in the field of construction machinery. This is a rare technical resource for construction machinery companies. Prior to this, domestic high-end hydraulic components were almost completely dependent on imports. It is understood that Weichai Power is actively planning to build factories in China to promote the localization of high-end hydraulic components. In this way, Weichai Power and XCMG have a broad space for cooperation in expanding product scale, reducing product costs, and achieving localization. Combining strategy with the distance According to the agreement, the two parties will conduct comprehensive cooperation in various fields such as capital operation, product development, and market support, and they will cover various product lines of Weichai Power, including hydraulics, engines, gearboxes, and axles. Weichai Power's supporting ratio in Xugong Machinery's products will be further increased. It is expected that full switch will be achieved in the next three years. The two sides will also strengthen high-level mutual visits and establish a mechanism for mutual visits by the Chairman. For this strategic cooperation, Weichai Power Chairman Tan Xuguang is full of expectations. He believes that the combination of Weichai Power and XCMG Group is based on the current and long-term perspective. It is a new development approach that takes into consideration both the distance and the nearness. It is not only beneficial to enterprises, but also beneficial to the industry, and strives to improve the innovation-driven development capabilities of China's equipment manufacturing industry. It is the common expectation of the two companies. According to his analysis, the cooperation with Xugong will help promote the transformation and upgrade of Weichai Power. With the adjustment of product strategy, Weichai Power will devote more resources to such strategic markets as passenger cars, agricultural equipment and construction machinery, so as to maintain the long-term stable development of the engine business. XCMG will provide a good platform for the development of Weichai Power's non-road engines. At present, Weichai Power has built a full range of 2L-13L full-range engine platforms, and its products fully meet the needs of Xugong's various product lines. With the dominant position in the heavy-duty truck industry, Weichai Power, whose engine technology has reached the fourth and fifth national emission standards, is waiting to be seen in the emission upgrades in the field of construction machinery. It is understood that the development of commercial vehicles and construction machinery companies in China is now basically taking two modes, one is vertical integration, the use of joint ventures or mergers and acquisitions, the acquisition of core components, the engine, transmission, bridge in the bag; The other is the horizontal integration of resources, forming a strategic matching relationship with major components and jointly coping with industry risks. Industry experts believe that both approaches have advantages and disadvantages. For the construction machinery industry, due to the diversification of product varieties, it is still difficult to develop the core components and scale. The world's well-known construction machinery companies own very few engine plants. In cooperation with Weichai Power's deepening cooperation, Xu Min, Chairman of XCMG Group, said that this is a memorable node. XCMG and Weichai Power have maintained good cooperative relations for many years, both in the product and in the market. The degree of agreement, the signing of a strategic cooperation agreement has a wide range of space for both the development of the market and the research and development of products in the future. More crucially, the combination of foreign brands and the Chinese market will take a long time to run in, and the combination of the two major national brands with a good foundation for cooperation will not only stimulate market vitality, but also add impetus to the development of the industry. It will also support the same beliefs. Under the ideal lighting, we will jointly promote the accelerated transformation and upgrading of the national equipment manufacturing industry, and we will be able to play a firm role on the world stage. As a traditional means of transportation, gasoline vehicles have always played an important role in people's lives. 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Strategic cooperation between the two parties 
Xugong signed contract with Weichai
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March 31, 2024