SINOTRUK tapping market with independent innovations

On Dec 5th, a new heavy truck HOWO-A7 was driven into the Headquarter of SINOTRUK for final inspection. This new model made its official debuted on the 2009 Business Meeting of SINOTRUK in the middle of this month.

HOWO-A7 was painstakingly created by SINOTRUK in 3 years and is the latest heavy truck after multiple experiments in different complex environment, which not only realized the dream of SINOTRUK to break through the market barrier and world top level, but also arose as a pioneer in the current down market.

In the second half of 2008, the impact of international financial crisis also hit the heavy truck industry of China. SINOTRUK gave full play to its technological, product and capital advantages, actively carried out strategic arrangement and finally realized sound development.

According to Mr. Ma Chunji, the Board Director of SINOTRUK, up to the end of October, SINOTRUK has accumulatively produced and sold over 100,000 heavy duty motors and 115,000 heavy truck engines, realizing sales income of RMB45.9 billion yuan, which was an increase of 47.1 percent year on year; and foreign exchange income of US$420 million, which was an increase of 26.4 percent year on year. SINOTRUK fulfilled the main business index by two months earlier, taking the lead in the industry.

As the pioneer of China's heavy duty motor industry, SINOTRUK turned technological advantage into marketing advantage, made independent innovation as the original motive of enterprise development and stuck to innovative strategy.

In the upgrade of emission standard, most of enterprises in China adopted high pressure common rail engine, whose core technology was only grasped by a few foreign enterprises. Facing the difficulties of short supply of this type of engine and high cost of core parts at RMB20, 000 yuan, SINOTRUK launched EGR engine for which it owned full independent intellectual property right. Compared with the high pressure common rail engine, EGR reduced the unit price by RMB14,000 yuan or so, together with 70 percent parts could be generally used, repair cost remained far lower than the high pressure common rail engine and the fuel consumption was reduced by 5L per hundred kilometer.

As the EGR was launched, SINOTRUK greeted rapid regain of production and sales amount. In October, the high pressure common rail engine had to cut down price emergently. EGR engine smashed foreign enterprises' block to engine emission technology and paved a new path for China's heavy truck industry. The experts in the industry said, EGR not only created enormous economic benefits for consumers, but also saved 2-3 years of time for domestic parts manufacturers.

However, as SINOTRUK tended to regain its previous vigor, the coming international financial crisis knocked the monthly sales of heavy truck below half of the average in the first half of 2008, even below 1/4 of the thriving months in some enterprises. Therefore, SINOTRUK launched their industriously-designed high-end heavy truck-HOWO A7 in the hope of extending market advantage and turning the crisis into opportunity.

HOWO A7 aimed at maximizing user's value and adopted international latest technology, meeting the work top level in comfort, positive and passive safety, reliability and electronization. The brand new D12 engine series of SINOTRUK is the domestically most representative heavy truck engine at present, whose large emission and great power empower the auto motor powerful drive at very low speed, together with its largest torque within the wide turning speed scope, all determines the perfect cost-effectiveness and driving performance of D12 series. The AI-shift transmission, disc brake and 430 pull-type clutch are all first adopted in China.

On Nov 17th 2008, SINOTRUK and Datong City entered into strategic cooperation agreement to establish strategic cooperative relationship on key projects of engine, pressure amplifier, complete vehicle, refitting vehicle, professional vehicle, engineering machinery, automotive logistics and commercial bank, in order to fulfill the mutual beneficial and win-win objective. On Nov 18th, SINOTRUK and Datong Gear Co., Ltd. entered into a strategic restructuring and equity transfer agreement, from then on, the 50-year professional transmission case manufacturer became a subsidiary of SINOTRUK. This acquisition not only effectively broke the bottleneck of transmission case supply and demand and realized self-sufficiency of SINOTRUK, but also extended the industrial chain upward by restructuring Datong Gears Co., Ltd, which promoted internal growth of both parties, gradually realized export of several assemblies and effectively improved the risk resistance capacity of the enterprise.

Before that, SINOTRUK successively controlled the shares of Liuzhou Yunli Special Vehicle Co., Ltd. and Hubei Huawei Special Vehicle Co., Ltd. (Suizhou, Hubei) through capital, technological and brand investments, which had become the important part for SINOTRUK to create steel network, integrate local resources and reinforce regional strategy.

Meanwhile, SINOTRUK actively sought for strategic cooperation with upstream and downstream enterprises to fight against the international financial crisis. Recently, SINTRUK, Jigang Group, Shanshui Group, Yankuang Group and Xinjiang Ferrous Metallurgy Group preliminarily entered into a strategic cooperation agreement to establish strategic cooperative relationship. Each party will give full play to their own advantages and support each other with preferential policies and financial assistance, so as to deal with the operational pressure arisen from international financial crisis and to safely pass through current hard time.