From February 17 to February 19, when the Volvo Ocean Race 2011-2012 was suspended in Sanya, Volvo Construction Equipment held the largest customer event in the Chinese market in Sanya, Hainan. More than 6,000 VIP guests participated in Volvo Worldwide. At the Sanya station, a reporter from China Construction Machinery Business Network was invited to participate in this event. He also interviewed the Executive Vice President of Volvo Group Truck Joint Venture Division and Director of Volvo (China) Investment Co., Ltd. on the relationship between truck and China Construction Machinery. Mr. Pan Weibo.
Pan Zong: I introduce myself. My Chinese name is Pan Weibo. I am responsible for Volvo Truck's Asian business and I work in this position for four years. At the earliest time, the Volvo Group was responsible for all functional departments. Related work, and then also to the Volvo Group's national markets have also done work in the field, once served as the group's CFO (Chief Financial Officer). Welcome everyone to ask questions.
Reporter: What changes do you want to bring to the Chinese market?
Mr. Pan: When talking about the change in the Chinese market, I think the first thing to talk about is that we have been working in China for 20 years. In the past 20 years, we have discovered that the Chinese market is light and heavy. Businesses have changed a lot and our business is getting better and better. From this perspective, the Chinese market has changed considerably. And in the future, China will always be one of the most strategic markets for our Volvo Group. It is expected that China will become the most important market in the world in the near future. In addition, I would like to add that in China, our team of employees has reached a scale of 6,000 people, and among the business lines in China, our building equipment business is currently the most compelling, and the construction equipment business has become the most advanced in China. Business. All in all, I am very satisfied with the performance of the Chinese market over the past five to ten years.
Reporter: Do you think the situation of the Chinese market in the next five years, whether there are some bottlenecks or some troublesome areas need to be broken and resolved in a short time.
Mr. Pan: When talking about the bottleneck that China may encounter, I think the biggest bottleneck is the problem of production capacity. Because China's rapid growth and the increase in customer demand also mean that we must continuously expand our production capacity. So this can be It is a bottleneck that must be overcome. In terms of challenges, I think the other major challenge is how to ensure that the new products and services introduced in China are customized products and services that can truly meet the needs of customers, so China’s rapid growth will come to our company. In fact, it also means tremendous pressure. Of course, what I would also like to add is related to the talented person. That is, the rapid growth of the company's business also needs to be supplemented with talents. It must recruit talents quickly in recruiting, and it must also be able to reduce the loss of talent.
Reporter: You mentioned the issue of production capacity. I would like to ask. In the following, what are the specific measures for capacity expansion in the Chinese market? Because we know that the previous stage, including China's joint venture policy, including the existing several partners, may have some real policy bottlenecks, market bottlenecks, how to break through?
Mr. Pan: In the past few years, we have always been working on capacity. One is production capacity. Second, in terms of new products, we are constantly investing in China to ensure that other than joint ventures and joint ventures. Factories can increase production capacity.
Reporter: Are there plans to further expand investment and joint venture partners?
General Manager Pan: When it comes to joint ventures, of course, there are also constraints on the one hand of China's auto industry policy. But all in all, we are very satisfied with the current joint venture partners, so we have not opened any new joint ventures. With such a desire, on the passenger bus side, we have Shanghai Shenwo, we have temporary construction equipment and trucks, and these joint venture partners are still very happy. So we have not increased the number of joint venture partners. This plan.
Reporter: Last year, Volvo Group seemed to have a restructuring. What kind of situation is that restructuring? And what is the impact of this restructuring on the Chinese market?
Pan Zong: You said something good. We did reorganize at the group level, especially in the truck business. The truck business is the most important to us because its sales contribution rate to our group. It is 65%. In the truck business, we have set up a total of five departments after restructuring. Three of the five departments are regional sales and marketing departments. The three regional departments include the Americas Sales and Marketing Department. , as well as Europe, Africa, Middle East Marketing, and Asia Sales and Marketing. In addition to these three regional sales and marketing departments, the other two are the Production Department and the R&D Department. Just now, the five departments were introduced. In fact, there is another department that is the sixth department, which is the truck joint venture business unit. This is also a department that I have been responsible for. In the truck business at headquarters, the impact of such a vigorous reorganization on China is relatively small, because after all, the main business of the Chinese market is still the construction equipment business, so the proportion of truck business is still relatively small and basically has not been affected.
There are two reasons for the restructuring of the truck business. First of all, as one can conclude from the analysis, we hope to be closer to our customers and distributors in each region. The second reason is that we It is hoped that the efficiency of production can be improved through reorganization.
Reporter: I would like to ask, perhaps in the first two years, China's investment in infrastructure has slowed down. Will this large economic environment affect our basic equipment business? The second is that in the past, our heavy trucks, especially for the competitiveness of Chinese companies, were relatively weak. How can we strengthen this in the coming years?
Mr. Pan: Indeed, in the past year, China’s overall economy and some major industries have indeed slowed down compared to 2010. The slowdown in the growth of the Chinese economy and certain industries has had a positive impact on our influence. Because in the past years, the explosive growth of the Chinese market has had its risks. For us, it will instead form a certain degree of risk. pressure. Then after such an adjustment in 2011, both our Volvo and Lincome brands have achieved very strong growth in China, including a 20% increase in Volvo brand sales and a 62% increase in temporary labor, not only in market share. It has been expanded and there has also been encouraging growth in profitability.
As for the trucks, how do I improve the competitiveness? I think there are two articles that can be done. One is that in the brand of UD, we need to further tap potential. We are a joint venture with Dongfeng, At present, it is not very big, but it has entered a very good growth track since 1996, and Unid Lion itself is a leading brand in Japan and Southeast Asia, so in terms of potential, we can still dig deeper. potential. Both, in terms of high-end European brands, we should increase the marketability of Volvo brand and Renault brand in China. When it comes to the Volvo brand and Renault Trucks, I think we actually have a very significant lead in the five-year total cost of ownership. If we go to subdivision and explain it, I think in fuel consumption and in energy efficiency, greenness and maintenance. In terms of cost, as well as the value-preserving aspect, that is, such a value-preserving aspect of used cars, we still have certain advantages.
Reporter: I would like to ask a question about passenger cars. Shenwo's products are easy to see on the streets of Shanghai, but it is not very common in other major cities in China. This may have something to do with local policy procurement, including the topics of the forum yesterday. It is also the city's transportation infrastructure slowdown in China, but the policy above, the increasingly high degree of attention to urban transport, the future of urban transport, passenger car this will not be Volvo in the Chinese market a new business breakthrough point ? Are there any more detailed plans?
Mr. Pan: Obviously, the bus is a business that we attach great importance to in China. The cooperation between the two companies should be said to be very successful. Although the overall bus market fluctuates, we will focus on the bus in the future. The further penetration of the Chinese market, especially in the adoption of new technologies, hybrid power and electric buses, will be a big trend in the future. At present, we are already experimenting with hybrid buses in major cities like London in Europe. We believe that there will be direct effects for China. So during the Expo, in fact, we already have trial-operated super capacitor cars and hybrid buses.
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