In the first eight months of this year, despite the negative impact of a drop of 20 percent in the domestic marine power sector, the marine power sales of Yuchai Group grew by 70 percent, continuing industry-acclaimed Yuchai phenomenon.

Tripod

Yuchai has manufactured marine power for over four decades, but has made great efforts on marine engines in recent years.

In June 2008, Guangxi Yuchai Machinery Group Co., Ltd. invested in establishing Yuchai Zhuhai Marine Power Co., Ltd. in Ziyang, Sichuan Province. Three years later, Yuchai established CSR Yuchai Sichuan Engine Co., Ltd. (YCSR) in association CSR Corporation and Sichuans largest commercial vehicle manufacturer Ziyang Nanjun Automobile Group Co., Ltd., with a total investment of 3 billion yuan, thereby becoming the largest high-speed vehicle engine manufacturing base in the western region, as well as the largest medium-speed engine R & D and manufacturing base in the country. In 2012, YCSR yielded bumper fruits. YCSR achieved sales revenues of over 1 billion yuan in 2011, has set a new target of achieving sales revenues of 1.5 billion yuan and a profit of 30 million yuan, and will form a scale of 10 billion yuan in the future, said Zhang Zhengqing, chairman and Party secretary of YCSR.

Almost at the same time, Yuchai initiated its distribution in the southeastern coastal area. In September 2009, Yuchai invested in establishing Yuchai Marine Power Co., Ltd. (YCMP) in Zhuhai, Guangdong Province, to manufacture and sell low-speed large-power marine diesel engines. With a total investment of four billion yuan, the project was implemented in two phases and had the largest investment apart from the headquarters base. As YCMPs new installation and commissioning workshop came on stream on July 13, 2011, the company had signed sales contracts for 19 units with six customers with a total value of over 300 million yuan. This year, YCMP has made new progress. In March 2012, YCMP delivered the first W6X35 engine to the customer, marking it has been capable of supplying engines for ships in the Pearl River estuary and marine engineering.

So far, Yuchai has established three companies in the marine power sector--YCMP in southeast Chinas Zhuhai, YCSR in southwest Chinas Sichuan and Yuchai Machinery Co., Ltd. in south Chinas Yulin where Yuchai is headquartered, taking on a pattern of tripod. Despite a small share of marine power products in Yuchais business sectors currently, the distribution in this sector has obviously been elevated to a strategic level according to its recent performance.

Complete product range

Yuchai is known as a manufacturer with the most complete range of marine power products.

According to sources, Yuchai marine diesel engines fall into 16 series, range from 30hp to 2,000hp in terms of power, and can meet the power demands of different ships from ocean-going fishing vessels to yachts. Yuchais major products include YC6MK generator diesel engine and YC6K electric control generator diesel engine, YC6C, YC6T, etc. In March 2012, Yuchai developed three new models--12VC, 12VT and 8C high-speed marine engines.

YCMP-manufactured low-speed large-power marine diesel engines are worth mentioning. According to sources, Chinas shipbuilding industry has relied on import for 70 percent of large-power engines for many years, thus severely restricting industrial development. By cooperating with Wartsila, YCMP has marched into the low-speed marine engine market, progressively formed a product chain covering a full series of marine engines of all speeds, and become a professional marine power supplier. In the way of technical licensing, YCMP turned out RT-flex35, RT-flex40, RT-flex48 and RT-flex50 full electric control common rail low-speed marine diesel engines, with a power range of 3,475kW to 13,960kW. In March 2012, YCMP delivered the first W6X35 engine to the customer. According to a head of Yuchai, W6X35 is a second-generation model independently developed on the basis of Wartsila RT-flex35. Industrial experts spoke highly of the model, acclaiming it as the first newly designed global low-speed engine manufactured by a new Chinese plant, opening a new chapter for the development of Chinas shipbuilding industry.

Besides cooperating with multinationals like Wartsila, Yuchai has extensively borrowed advanced international experience to lay a technical foundation. Yuchai has three sources of marine power technologies, according to sources. Referring to the mode of YCMP-Wartsila cooperation, a head of Yuchai said YCMP manufactures with the license granted by Wartsila. Meanwhile, Yuchais engineers work with their counterparts from Wartsila on new product R & D. Additionally, Yuchai has a long-cooperative technical platform, including long-term cooperative projects with FEV of Germany and AVL of Austria. All cooperation is reflected in products. For instance, YCMPs key model YC6B marine diesel engine indicates it is developed by Yuchai based on the technologies from FEV of Germany and Yamaha of Japan, and mentions it uses reentrant combustion technology from FEV. Another model--YC6T marine diesel engine also indicates it is manufactured in accordance with AVL design standards and codes, and mentions AVLs four-valve technology. Besides, by cooperating with the Japanese company in developing marine power products, Yuchai has learned advanced innovation concept while introducing its advanced technology.

Rapid growth

A prominent characteristic of Yuchai marine power products is large increment but low proportion.

The output of Yuchais marine power products was only 10,000 units in 2000, but soared to 20,000 in 2011. The market share of single units shot up from 3 percent from 15 percent. This year, Yuchai aims to manufacture 30,000 units.

However, the sales of marine power products make up a small share of the total sales of Yuchai engines. According to the data in 2011, Yuchai manufactured and sold 600,000 engines, including 20,000 marine engines.

Since the beginning of this year, Yuchais marine power products have maintained fast growth. In the first eight months, despite the negative impact of a drop of 20 percent in the domestic marine engine industry, Yuchais marine power sales grew by 70 percent.

Yuchai has set a higher objective of selling 50,000 marine engines with revenues of over 3 billion yuan by the end of the twelfth five-year period.

To achieve the objective, Yuchai has planned its institutional setup. Early this year, Yuchai established the Marine Power Department to help expand Yuchais operations in the marine power market from such aspects as order management, market survey, supporting product development and validation, and after service. In terms of R & D, Yuchai established the Marine Power Research Institute, and built up a wide competitive marine power marketing network consisting of over 20 domestic distributors and several overseas distributors. Thanks to the outstanding performance of these distributors, Yuchais have achieved breakthrough in marine power sales in several domestic regions. Yuchai has equipped some 800 ships in Chongqing Hechuan District and Tongnan County. However, the market share of Yuchai marine engines in Chongqing was almost zero two years ago. With the efforts of local distributors later, Yuchai has sold over 200 marine engines so far, including some 50 YC6T engines, with a market share of over 90 percent.

Yuchai has also planned manufacturing bases. With a total planned investment of 618.87 million yuan, Yuchais marine power manufacturing base project involves constructing a processing workshop for C and T diesel engines, arranging machining equipment and constructing an assembling & testing plant building. After completion, the project will form an annual production capacity of 6,800 marine diesel engines.

Additionally, Yuchai has added marine power products to gas engine manufacturing base. Yuchai gas engine manufacturing base primarily manufactures YC4D, YC6J and YC6MK gas engines, as well as YC6T and YC6C engines. Phase 1 of the project was launched in late 2011, the main works of the production workshop have wrapped up and the workshop has entered the stage of equipment installation, and the main works of the heavy-duty gas engine production workshop has also almost been completed. According to the project progress, two testing beds are scheduled to be trial-manufactured in late October 2012 and go into production in late December. Developing and manufacturing large-power gas marine power will be Yuchais new deployment for marine power products in the next period.

(Source: Yan Manqing/China Industry News)