Reshaping the Manufacturing Benchmark: How CIMC Vehicles

(2 July 2024, Hong Kong) As the global leading semi-trailer manufacturing industry for 11 consecutive years, CIMC Vehicles (Group) Co., Ltd.’s (“CIMC Vehicles” or the “Company”, Stock code: 301039.SZ) robust performance growth and relentless innovation have been under the industry's spotlight. However, facing complex situations with domestic demand slowing down, limited application of cutting-edge technology in traditional manufacturing, and severe low-quality competition, how CIMC Vehicles maintains its leading position and leads the industry towards high-quality development has become a central concern in the sector.

Addressing this significant issue, Li Guiping, CEO and President of CIMC Vehicles, systematically elaborated on his insights and proposed a “prescription” in a recent external interview. He pointed out that new quality productivity is not just a manifestation of technological innovation but also a comprehensive reflection of organizational reform within enterprises, optimization of resource allocation, and more. CIMC Vehicles will firmly grasp the core of new quality productivity to lead the industry's breakthrough, providing more valuable references for the traditional manufacturing industry to achieve transformation.

CIMC Vehicles has always focused on the research and development of innovative design and production technology. In response to the inefficient production capacity issues in the industry, CIMC Vehicles has launched the “Star-chained Manufacturing Network”, focusing on integrating resources from its seven manufacturers to establish a new type of semi-trailer production organization. This new production organization will encompass key value chains, including procurement, production, circulation, and distribution.

The “Star-chained Manufacturing Network” utilizes a multitude of digital technologies, such as achieving innovation in semi-trailer design through digital design and PLM platforms and realizing centralized procurement of core components on the EPS platform. At the same time, the management of core components and the global supply chain is decoupled from specific manufacturing plants to enhance delivery efficiency.

Furthermore, CIMC Vehicles is now exploring partnerships with leading tractor manufacturers to create a business model of “Excellent Tractors with Excellent Trailers”. The Company offers customers combinations of “tractor and semi-trailer”, which represents not only a structural reform in production organization but also a profound integration of new technology with business models. These measures have not only enhanced the product quality and market competitiveness of CIMC Vehicles but have also provided robust support for the healthy development of the entire industry.

Meanwhile, Li Guiping stated that the key approach to building new quality productivity is to drive structural reforms within a production organization and reallocate resources. Taking “Star-chained Manufacturing Network” as an example, the Company has established a promotion committee to develop a new production organization based on its vision and roadmap. Within this new organizational structure, the Company retains its existing factories but reconfigures the production lines based on new technologies, creating workstations centered around extensive array of advanced manufacturing equipment to align with digital design trends.

However, this transformation also brings challenges, such as employees potentially not being accustomed to the new workstations or lacking an understanding of the digital modular product design process. Therefore, the Company has established a stable mid-platform, such as the Global Semi-Trailer Technology Headquarters, to consolidate and train engineers to ensure their skills are updated. At the same time, it has set up agile operational centers, such as the Star-chained Semi-Trailer Annual Model Center, to quickly respond to the demands of the “Star-chained Manufacturing Network” launch and iterate the annual model. In addition, the Company has also established production training centers at the factory level to help production workers adapt to the new environment and re-establish KPIs to revitalize employee motivation.

Since the “second venture”, the Company has actively expanded into overseas markets within the context of globalization. By focusing on local manufacturing, sales, and services, the Company's overseas enterprises have not only perfected the global semi-trailer business layout but also fully utilized CIMC Vehicles' comprehensive global supply chain and core component production organization, achieving a significant improvement in production efficiency.

Take SDC as an example. Despite facing challenges in the early stage, it has successfully enhanced production efficiency and performance through transformation and upgrading, relying on the global supply chain and production organization. This has allowed SDC to maintain robust growth and set a record for profitability even under inflationary pressures. Currently, CIMC Vehicles has fully established an “Intercontinental Operation” development pattern, with business covering more than 40 countries and regions, and has 21 “Light Tower” plants both domestically and internationally.

Through this exclusive interview, CIMC Vehicles has conveyed the Company's profound understanding and firm belief in new quality productivity. Li Guiping's insights and experience hold enlightening significance for the development of the entire manufacturing industry. Under the current economic situation, the manufacturing industry faces the urgent task of transformation and upgrading. Only by continuously innovating, deepening reforms, optimizing resource allocation, and employing various methods to build new quality productivity can achieve high-quality development and gain an advantage in market competition.

Looking ahead, CIMC Vehicles will steadily base itself in the new stage of development, fully implement the new development philosophy, and continuously deepen the implementation of the “Star-chained Manufacturing Network”. Continuing to promote the strategic layout of “Intercontinental Operation, Local Manufacturing”, the Company is committed to building a more comprehensive new development pattern, accelerating the forging of new quality productivity to meet challenges, seize opportunities, and boldly move forward towards the starry sea of the third venture.

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About CIMC Vehicles (Group) Co., Ltd

CIMC Vehicles (Group) Co., Ltd. (“CIMC Vehicles”, Stock code: 301039.SZ) is the world’s leading sophisticated manufacturer of semi-trailers and specialty vehicles. It is a pioneer in the high-quality development of road transport equipment in China, and an explorer and innovator in new energy specialty vehicles in China. According to the 2023 Global OEM Ranking List published by Global Trailer, CIMC Vehicles ranked first among semi-trailer manufacturers in the world, for the eleventh year in a row.

Each business or group of the Company continues to upgrade and iterate. The Company now operates “Star-Chained Light Tower Pioneer Group”, “North American Business”, “European Business”, “Champion Tanker Business Group” and “Dump Truck and Heavy Cargo Truck Business”, covering four major markets in the world, more than 40 countries and regions, and had 21 “Light Tower” Plants at home and abroad.

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