XCMG attacked the engine and broke the bottleneck that the construction machinery industry could not produce its own engine.

On September 7, Xugong teamed up with Doosan of South Korea to hold a signing ceremony for an engine joint venture project in Xuzhou. This is the first engine joint venture project of the Chinese construction machinery industry. The reporter learned from the Xugong Group Publicity Division that the above-mentioned joint venture company was named Xuzhou Xugong Doosan Engine Co., Ltd., and each of them held 50% of the shares.

The joint venture company has a total investment of 99 million U.S. dollars and a registered capital of 68 million U.S. dollars. The project is divided into two phases with a total investment of 84 million U.S. dollars. In terms of production capacity, the first-stage production scale is 50,000 units, sales revenue is 3.2 billion yuan, profits and taxes are 548 million yuan, and the long-term production scale is 100,000 units.

Joint venture for technical cooperation

Wang Min, Chairman of XCMG Group, stated at the signing ceremony that “into the engine is Xugong’s long-term strategic conception. This time, we are working with Doosan for technical cooperation. We expect XCMG to develop with other competitors.”

It is understood that for the entire machine product, domestic companies can produce products such as excavators and cranes by purchasing imported components and then assembling them. However, for the core components such as the engine, it does not imitate. Currently many large domestic construction machinery companies, including Sany Heavy Industry, Zoomlion, and Liugong, cannot produce their own engines.

“This is the fundamental reason why we are determined to develop our own brand engine. Once we are successful, we will fundamentally change the fate of foreign companies.” A senior vice president of XCMG expressed to the reporter of “Daily Economic News”. .

Since the domestic market currently does not have sales of large-scale diesel engines of more than 500 horsepower, the XCMG Group's engines for high horsepower all depend on imports. Other construction machinery manufacturers such as Sany Heavy Industry, Liugong and other companies must also rely on imported high-powered engines.

“The engine has always been a problem that restricts the domestic construction machinery industry. If XCMG can develop and produce engines by itself, it will change this embarrassing situation.” Yesterday, Wang Ruixiang, president of the China Machinery Industry Federation, said.

It is also understood that the core technologies of the above-mentioned joint venture projects are mainly provided by Doosan Corporation of Korea. Although Doosan’s technology cannot currently surpass world-leading companies such as Caterpillar and Cummins, the company’s engine technology far exceeds that of domestic companies. The joint venture with Xugong was the first joint venture established by Doosan of Korea outside of the country and its technology transfer was crucial.

Long-term intention is to expand the industry chain

In terms of strategic planning, XCMG entered the engine and has the intention of expanding its industrial chain to heavy-duty trucks. "The joint venture company will introduce diesel engine technology that was developed in parallel with Doosan of Korea. The initial stage will be four models, which will basically meet market demand," said the Xugong Group Publicity Agency.

“After this joint venture with Doosan, Xugong’s off-line diesel engines will meet the demand for construction machinery products on the one hand, and will be supplied to Nanjing Xugong Automobile Co., Ltd. on the other hand.” Another insider of Xugong Group points to the “Daily Economy” News reporter revealed. According to this person, the current strategy is still in a highly confidential state and has not been publicly released so far.

CITIC Securities pointed out in a report that it is optimistic about the cooperation between XCMG and foreign companies in the engine sector. Because the engine is one of the three key components of construction machinery, the future market has great potential. Currently, XCMG's heavy-duty engines are mainly supplied by Shangchai and Hangfa, and the annual procurement cost has remained high.

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