Premier Li Keqiang mentioned a new concept for industrial development in the government work report during the NPC and CPPCC annual sessions this year: "China manufacturing 2025". This will play a vital role in guiding China's manufacturing development in the coming decade. China will adhere to innovation drive, promote the medium & high-end development of the industrial structure, and quicken the pace of changing from a "large manufacturing country" into a "manufacturing power".

--Preface

China's traditional manufacturing is facing an unprecedented competition pattern.

At the beginning of the New Year, some Chinese people's enthusiasm about overseas articles made China's manufacturing much embarrassed and exposed a lot of weaknesses to be improved in the transition from "China's manufacturing" to "China's intelligent manufacturing".

As a Chinese internal combustion engine manufacturer, Yuchai is also facing the impact and massive technical competition from foreign industrial giants. In the Euro VI engine tender of Beijing Public Transport Group (BPTG) in late 2014, Yuchai fought it out with foreign industrial giants. In early 2015, Yuchai got off to a flying start with a stack of orders from Europe.

Yuchai released 10 new models in February 2015

Yuchai has initiated and implemented the "second startup" according to the business policy of "making a new start, accumulating internal strength and promoting upgrading". In 2014, Yuchai Group achieved sales revenues of over 40 billion yuan, and its brand value increased once again: on the list of China's 500 Most Valuable Brands in 2014 in Beijing, Yuchai was ahead of other domestic engine manufacturers with a brand value of 18.816 billion yuan.

This is the result of Yuchai's devotion to corporate management and technical innovation model reforms. Yuchai has followed the pace of the country to march towards high-end manufacturing through the "second startup".

Building world top production lines in terms of "software" and "hardware"

Gone are the times when China's manufacturing stayed competitive by low cost. Strong manufacturing power is fundamental to manufacturers' survival and development. Thus, Yuchai has conducted comprehensive deployment to kick off its exploration of the management model suiting the development of Chinese enterprises and conducive to the accomplishment of transformation and upgrading.

In recent years, Yuchai has advanced its manufacturing power in terms of "software" and "hardware" in light of the international and domestic situation of manufacturing technology development. In terms of software, it has advanced lean manufacturing, established Yuchai Lean Manufacturing Management Model (YCPS) and accomplished the flat management of production; in terms of hardware, it has constructed intelligent production lines to manufacture quality products.

3D printing is currently the most cutting-edge technology in the manufacturing field. In 2006, Yuchai initiated the R & D of "PCM" (a 3D printing technology). Now Yuchai's PCM technology has been applied in fields such as new product trial-manufacturing, lightweight process testing of products and testing of frontier high-end technologies. In 2014, Yuchai manufactured the prototypes of over 10 new models through PCM. Through cold forming 3D printing and laser thermal forming 3D printing, Yuchai independently and innovatively made a 2mm ultra-thin jacket core. Upon successful one-time core assembly, a sample body up to advanced international standards was casted.

Talents are indispensible to manufacturing power improvement. In 2014, Yuchai sent its management team, technical team and technician team to advanced domestic and European enterprises for learning, thereby reforming their thinking. Now Yuchai is working with a German company to develop the high-end technology of high-strength ultra-thin core making, and working with the China Academy of Science & Technology to develop the Yuchai Rapid Manufacturing Base of the State Key Laboratory of Advanced Forming Technologies and Equipment, the first of its kind in south China, so as to comprehensively deepen cooperation and exchanges in new technologies, processes and methods, and improve Yuchai's manufacturing capacity.

Lean manufacturing is the important basis of Yuchai's management reform. In early 2014, Yuchai completed the major reform of its plants by restructuring its four engine plants into six in view of specialization and serialization. After the restructuring, the capacity of Yuchai's production lines was improved systematically, and its capacity for professional manufacturing has been boosted.

In terms of production capacity expansion, according to the development trends of the gas engine, marine engine and generating engine markets, Yuchai invested heavily to expand the production capacity of gas engines and marine engines. In August 2014, Yuchai's large-power marine engine assembly line went into trial production, laying a solid foundation for marching towards the large marine engine market.

In the next period, Yuchai will focus on future manufacturing power construction, and continue to improve its manufacturing power in terms of "software" and "hardware", so turn out quality China-made products.

Making technical innovation, switching from product manufacturing to technical service

Technical innovation is the weapon with which Yuchai has kept ahead in the market. In 2014, Yuchai seized the opportunity of the switch of commercial vehicles to the national IV emission standards to invest over 500 million yuan in product R & D and technical innovation. With its innovation achievements fully recognized by the society, it has won honors such as

"Top 100 Manufacturing Technology Innovation Bases" and "China Grand Awards for Industry--Nomination Award".

Major achievements in the R & D of products such as heavy-duty engines, gas engines and marine engines have enhanced Yuchai's market competitiveness. In terms of heavy-duty engines, Yuchai launched a 400hp 6MK engine applicable to highway trucks at the 2014 new product launch conference, which has outstanding performance and consumes 32 liters of fuel per 100 kilometers as the result of a high-speed test, saving 6 liters compared to competitive products; in terms of gas engines, Yuchai completed the technical upgrading of national V gas engines, initiated mass rectification and switch, and had stable and controllable market performance; in terms of marine engines, Yuchai achieved breakthrough in large marine engines, successfully developed the first 16VC marine engine prototype, and gradually introduced marine electronic products into the market, thus developing competitive edge.

Yuchai achieved new breakthrough in product innovation in the off-road engine field. In 2014, to cope with the upcoming T3 emission regulations for off-road engines, Yuchai advanced two special engines up to the T3 emission standards to the market in advance.

In 2014, the Nanning base of Yuchai R & D Center went into operation and the Suzhou base broke ground. Thus, Yuchai's R & D hardware infrastructure has been further improved to provide fuller guarantee for technical innovation. Yuchai Machinery Co., Ltd. (Yuchai Machinery) applied for 695 patents and won 515 authorized patents, ranking 1st in Guangxi in terms of patent application for the ninth consecutive year. Also, Yuchai Machinery released 1 national mandatory standard and 1 industrial standard, and was involved in the formulation and revision of 7 national and industrial standards.

Over 60 percent of service vehicles for the ongoing NPC and CPPCC annual sessions in 2015 are powered by Yuchai

Yuchai has mastered the Euro VI emission control technology for engines and its YC6L-60 engine passed the EU E/e-mark certification test, which have made full preparation for the successful marketization of its Euro VI engines. In 2014, Yuchai Euro VI diesel engine got an order from Beijing Public Transport Group as the only homemade Euro VI engine, fully showing Yuchai's leading role in low emission engines.

The Euro VI emission standards are known as ultimate emission standards. When the prototype of Yuchai's Euro VI engine was launched in 2011, many European vehicle engine manufacturers were still at the stage of product development. Now Yuchai has accomplished the marketization of Euro VI engines and synchronization with developed countries in technology and manufacturing, showing that Yuchai has been capable of technology and product output.

While advancing independent R & D, Yuchai has kept expanding foreign cooperation in fields such as R & D and manufacturing and working with internationally and domestically renowned research institutions on technical development. For example, Yuchai has signed strategic cooperation agreements with Stanadyne and the China Academy of Science & Technology, to enhance and extend its advantages in off-road engine R & D and manufacturing, the technology of digital forming, the technology of advanced forming and the equipment of advanced forming, and accelerate the industrialization of Yuchai's rapid manufacturing and intelligent manufacturing.

From product R & D to manufacturing, Yuchai has developed mature technical advantage, and will strive to switch from product manufacturing to technical service.

Advance the "second startup" for globalizationFacing the changes and development of domestic and foreign environments, Yuchai released the outline of the strategic plan for the "second startup", and further defined its future development direction and emphasis with focus on transformation and upgrading in 2014: accelerating the construction of Yuchai New Industrial City, expanding domestic and international cooperation, intensifying the introduction and application of high and new technologies, focusing on extending two industrial chains--"engine" and "petrochemical", creating two service platforms--"finance" and "logistics", integrating resources, optimizing the structure, promote transformation and upgrading, and enhancing core competitiveness, so as to accomplish the sustainable operation and healthy development of the enterprise.

The "second startup" has achieved initial effects after one year of implementation. In 2014, Yuchai Machinery sold 484,000 units of engines, maintaining its lead in the industry. Yuchai Machinery's market share continued to grow by 1.3 percent. Yuchai Petronas achieved the two-digit growth of operating revenues and profit amid the industrial slump.

Opportunities and challenges will coexist in the future. In 2015, Yuchai will proceed with the "second startup" with focus on industrial restructuring, strive to complete system upgrading within around three years, optimize its production, organization, R & D, marketing and service systems, improve quality and enhance efficiency, and improve the capacity for international operation, thus building an internationally renowned brand.

Yuchai has initiated the construction of its overseas R & D centers, has been building international technical R & D platforms and accelerating its globalization, has achieved substantial breakthrough in its strategic cooperation with a host of internationally renowned enterprises, and will soon launch an array of major cooperative projects.

Yuchai has been taking increasingly firm steps on the road of globalization.

(Li Chunmei/Song Yonggeng/Yang Mingze/Chen Xiaoxiao/Guangxi Daily)