Weichai Group announced on Dec 18 its annual sales revenue was expected to reach 220 billion yuan ($33.57 billion) in 2017. It is forecast to make it into the Fortune Global 500 in 2018, making it the third company from Shandong province to do so.

The company's total net profits will exceed 10 billion yuan in 2017, according to Tan Xuguang, chairman of Weichai.

The leading heavy truck engines and components developer and supplier is located in the Weifang Hi-tech Industrial Development Zone. It is engaged in six market sectors: powertrain development, vehicle production, construction machinery, smart logistics, luxury yacht development and financial services.

Currently, 40 percent of its sales revenue and 30 percent of its net profit are contributed by overseas markets.

Tan said the company's outstanding performance in overseas markets indicates Weichai has grown into an international company.

According to Tan, Weichai Group, established in 1946, was on the brink of bankruptcy in the 1990s. Its total annual sales revenue was only 580 million yuan and staff members did not receive their monthly payments for six months.

Today, the company's annual compound growth rate has reached 36 percent.

"Focusing on the manufacturing sector was key for Weichai to create such a miracle," Tan said. "Our goal is to make our profit margin higher than property developers'."

Over the past 70 years, Weichai has made significant investment in expanding and upgrading its engine development business.

Statistics from the company show that Weichai has supplied 5.87 million engines, 6.7 million transmissions and 3.54 million axles to the heavy vehicle production industry since 2005. Shaanxi Heavy Duty Motor Co, a subsidiary of Weichai, has seen its annual sales volume hit 879,000 units in 2017, increasing from 14,000 in 2005.

Innovation has been considered the key support for Weichai's long-term growth. More than 15 billion yuan has been invested in engine development over the past 10 years, Tan said.

Global expansion

Weichai Group has speeded up its overseas expansion since 2009, when the global financial crisis put many leading manufacturing businesses under pressure. The company has successfully integrated global resources to support its expansion over the past eight years.

In 2009, its subsidiary Weichai Power acquired French marine engine developer and producer Moteurs Baudouin.

In 2012, Weichai Power bought a 25 percent stake in German forklift-maker Kion for 467 million euros ($556.86 million) and a 70 percent controlling stake in Kion's subsidiary Linde Hydraulics, for 271 million euros. In the same year, Weichai purchased a majority stake in Italian yacht-maker Ferretti, to tap into the luxury yacht sector.

Weichai America, a wholly owned subsidiary of Weichai Power, invested in leading alternative-fuel power system developer Power Solutions International in March last year, becoming PSI's largest shareholder. The deal marked Weichai's debut in the North American power market.

Tan said all those investment projects have reported high net profit growth and Weichai has become an iconic example of Chinese companies that are keen to expand their overseas network.

Ship engines jointly developed by Weichai and Moteurs Baudouin are used on ships in the United States. A factory built by Weichai and Linde Hydraulics reported more than 100 million yuan in sales revenue by the end of 2017.

"Decision-makers have to think carefully about how to better use foreign technologies and resources to upgrade their businesses," Tan said.

Wang Qian contributed to this story.

(China Daily 01/05/2018 page12)