21st Century Business Herald: Sany Heavy Industry's "Twin Towers"

Transferred from: Hexun.com Source: 21st Century Business Herald

Every Thursday is He Dongdong's "interview day". The managing director of Sany Germany GmbH (Sany Germany) said, "It is not so much that I interview others, but that I am interviewed by candidates." ”

The "interview" is often such a scene: candidates have endless questions about Sany, from strategy, brand strategy to realization path, etc., and only when He Dongdong's answers satisfy them will they consider joining. It is not easy to confuse these people, they have done a lot of research work in advance, including collecting Sany's background, customer groups, etc., and most of them will go to Sany's factory in Germany to do a "field trip" before the interview, and news reports are also one of the important sources of information.

*The initial recruitment process was like a "plane that started taxiing", and there was a lot of resistance. Trinity Germany tried everything: advertising in newspapers and magazines, attending HR events, reaching out to universities, and so on. Sany has a great reputation in China, even though it is "famous in the industry" in Europe, but the Germans don't buy it. Marketing Director Christiane Linkenback said she joined Sany Germany in December 2010 after more than 10 years of experience in the field of German construction machinery.

Is this simply attributable to "conservative"? The deeper reason is their distrust of this "Chinese" brand: the Chinese brand that they have in their impression is equated with low cost and low quality, is really ready to set fire in the backyard of the traditional machinery powerhouse? It's like water going from a low place to a high place, how is that possible? And how can it be done? Are they just trying to transfer technology back to China?

The speculation is not unfounded. "Germany is considered the birthplace and competitive center of construction machinery." Ms. Anja Schnieder of the VDMA press service said that Sany Heavy Industry is already a member of the German Engineering Federation, a government agency of the German Engineering Federation. "From our members, we understand that an important reason for foreign companies to invest in Germany is to be able to better understand future trends and stay ahead of the curve in the field of engineering and technology."

Although the German government at all levels is willing to extend an olive branch to Chinese companies like Sany Heavy Industry. The government of North Rhine-Westphadelphia (NRW), where Trinity Germany is located, has sent a doctor to "assist" Sany Germany in the preparation and initial operation of Trinity Germany, and the salary is paid by the NRW government. "In German law, those who invest in Germany are German companies, and there is no distinction between German and foreign capital." Cao Yi, senior manager of the public relations department of the German Federal Investment Promotion Agency, said. "Distrust" is still circulating, and local media reports reflect this "mistrust", which in turn spreads this mistrust. Just half a month before Sany Germany officially began operations, one of the country's most influential newspapers was still questioning, and its report was like this: Sany Germany's so-called 100 million euros investment was not in place at all.

"How to eliminate prejudice against Chinese brands? This is our *5655 challenge. He Dongdong said that from developing countries to European countries at the end of *5661, this is an unavoidable problem. Our strategy is to fight positional warfare, to move forward step by step. Behind this calm statement is the inevitability of "breaking the kettle": if it cannot achieve brand upgrades, Sany will be at the bottom of the global industrial chain like most Chinese companies, and will only make hard-earned money.

"Made in Germany"

After *5656 "interviews", Lincolnback decided to work for Trinity Germany.

*What struck her was that "this would be a German company": a factory in Germany, products manufactured by German workers, German management employed, and tailor-made products for European customers in a local R&D center. "When we opened, our slogan was 'Made in Germany'. He Dongdong said that the annual production capacity of the first phase of the project is 1,800 units, and these products will be sold under the brand of Sany in Europe and in traditional European brand markets such as North Africa and the Middle East.

It was August 2010, and "I asked them how many there are now?" Lincolnback's response was 50, compared to nearly 100 at the end of the year, compared to 160 at the current number, which is expected to increase to about 200 by the end of the year, 80% of which are locally recruited in Germany.

The first phase of the Sany Germany project alone will create 600 new jobs in North Rhine-Westphalia, which is attractive to both the local government and the population. "We attach great importance to the Sany project." Frank Weidmann, China project manager at Invest NRW, said that the size of the investment was one reason and that "I would not allow my competitors to get the project". At the same time, local mechanical engineering companies are laying off workers: "The Sinotruk manufacturer I worked for was preparing to lay off 600 employees. Lincoln Buck said. Ms. Anja Schnieder of the VDMA press office admits that compared with emerging markets such as China, the growth of the European construction machinery market is sluggish.

In May 2008, Sany Heavy Industry Holdings listed company Sany Co., Ltd. (600031. SH) announced plans to invest 100 million euros in the industrial park in Bedburg, North Rhine-Westphalia, a small city about 40 kilometers from Cologne. At one point, this plan was "reconsidered" because of the financial crisis. Since the end of 2006 and 2007, Sany Heavy Industry began its overseas layout, and in 2007, Sany Group's actual sales revenue was 13.5 billion yuan and profit was 4 billion yuan. In 2011, according to the third quarter quarterly report, the company achieved revenue of 41.303 billion yuan from January to September. According to relevant sources, "80% of the investment of Sany's overseas branch is invested by the group", and the remaining 20% is guaranteed by the parent company to borrow from local financial institutions.

He Dongdong introduced that the investment in the first phase of the Sany Germany project is 40 million euros, the second phase of the project codenamed "No. 2 plant" is about to start, and the third phase of the project is also being planned. "It is estimated that the investment in the second phase alone will be 100 million euros, and we will invest more in the third phase." He Dongdong said that the investment in the research center is calculated separately and "there is no cap". At present, there are 200 Chinese engineers and 30 or 40 German engineers in the research and development of the "European version" Sany products.

The mayor of Bedburg, Gunnar Koerdt, has been deeply touched by the benefits brought by the arrival of Sany, and two other Chinese companies are also negotiating with him to settle in Bedburg. Colter admits that "they" are all followers of Sany Heavy Industry and "provide them with product support".

Sany Germany has long promised to "put down roots in the local area", and one of its initiatives is to expand its procurement from local suppliers, "and the Germans are happy to see that". "Our factory was built by a German company." Lincolnback said that before the completion of the second phase of the project, the painting of the cement irrigation pumps produced by Sany Germany was also outsourced to a local German factory. "Cement of the FutureMixer trucksThe mixing drum will also be sourced from local suppliers. "At the moment this part is coming from China.

"Twin Towers & Transformers"

The "Made in Germany" strategy also shows the other side of the coin: because of cultural differences, "mixed-race" teams are constantly in conflict.

The recruitment process shows "how different we are": the Chinese do it more like parallel circuits, while the Germans do it in series. "Most Chinese companies that are still at the extreme of entrepreneurship tend to hire for all important positions at the same time: they are looking for marketing CEOs, marketing managers, and service engineers." The Germans were unreceptive to this, and the idea was to hire the head of the marketing department first, and then empower him to recruit department managers and service engineers.

The German Lincolnback, for example, said it was difficult to adapt to the "arbitrariness" of the Chinese. Two days before the Mid-Autumn Festival, she received instructions from her superiors on the eve of work to prepare some banners, slogans and huge curtains to celebrate the Mid-Autumn Festival. "Why can't you tell me a week in advance?" Lincolnback said that this would not only give her more ease, but would also reduce the cost of purchasing materials.

How to use series and parallel connection to the same circuit? "First of all, senior executives and key employees will arrange a trip to China as soon as possible after they join the company." He Dongdong said that this is done to gain their basic respect, "if they accept Sany's corporate values and culture, and the communication with each other can be based on common demands."

Lincoln Barker was deeply impressed by his trip to China in April this year: there were as many as 100 mechanical engineering vehicles parked at the entrance of Sany Heavy Industry headquarters, while large German manufacturers generally only had 5. "Most of my colleagues have been in the industry for more than 30 years, and we all find the company growing at an incredible rate." What surprised Lincolnback even more was that the quality of Sany's products was also quite good. "Now we go to the exhibition, and the people who want to cooperate with Sany are Germans."

But how do you convert between series and parallel? Sany Germany's approach is to set up "twin towers", and the two teams work together: the specific approach is that each main position is set up with one pair, such as the financial director and marketing director are German, and their deputy is Chinese. These Chinese "deputies" act as a "transformer" between the two cultures, and their responsibility is to "transform" the culture, logic and communication language of the Chinese headquarters so that the Germans can understand and understand, and then the German colleagues will directly export them to the European market.

"If you had German employees directly facing a huge Chinese headquarters, the language barrier would be a big one." He Dongdong said that he had participated in the construction of Sany Heavy Industry's overseas branches in India, the United States and other overseas branches, and he had a deep understanding of this; What's more, "the finance department, the personnel department, and the procurement department all have their own communication logic", and Chinese colleagues obviously understand this logic better.

In the same way, the Germans can also get twice the result with half the effort by opening up the German market. For example, in the marketing department where Lincoln Buck works, "for example, after receiving the publicity decision for the 37 model, it is up to me to decide how to establish the image of this product in the German and European markets and how to do marketing." Lincolnbacker said that while there is still liaison and coordination with headquarters, the specific operation is entirely "up to us to decide based on market conditions."

"Concrete Tactics"

With the team ready, Sany Germany chose the strategy of "cutting" the German market with concrete machinery.

The use of this "tactic" is due to the fact that the concrete works are W* brand products of Sany Heavy Industry. This is not only reflected in the fact that Sany's concrete machinery sales volume has ranked 5656th in the world for two consecutive years, but also maintains a sustained high growth momentum. Taking 2010 as an example, Sany Heavy Industry's various concrete machinery products have maintained a growth rate of more than 90%.

But will this "W* brand" work in the European market? Sany's concrete machinery was previously "exported to Europe in very small quantities", although it is a major brand in the Indian market, but this experience obviously cannot be transplanted to Europe: India is a low-end market, reducing costs and selling prices are king. In one case, even though the weather in India was as high as 40 degrees Celsius, a customer still requested that the air conditioning in the operator room be removed. This simply doesn't work in Europe.

"Competition* must eventually return to the essence of business." He Dongdong said to see who can better meet the needs of consumers. After entering Germany, the Sany team did *5656 things to collect standards, and *5656 months alone collected more than 70 product-related standards; Based on this, the research team conducts product research and development, while combining the specific requirements of customers; For example, some roads in Europe are relatively narrow, and the cross-section of the concrete watering machine should be narrowed; There are three folds for watering the rocker arm and there are four folds. These products are formed into actual orders only after the customer is satisfied with the trial.

According to Lincoln Buck, Sany Germany has sold several cement mixer trucks and some cement irrigation pumps. It is reported that the price of these "European version" Sany products is about 50% higher than that of domestic products, but there is still a price difference of 10%-15% compared with international *5660 products. This is the price strategy of new entrants, "stay in the same camp as the *5660 brand first".

However, costs are also rising, and whether Sany Germany's gross profit can be on par with the domestic market. In the past two years, the gross profit level of Sany Heavy Industry has always been around 37%, while the industry average is only about 25%. The labor cost alone is 7 to 10 times that of China. However, He Dongdong said that the total cost of Sany Germany is only about 30% higher than that in China.

Local sourcing is a big factor. "This eliminates the cost of customs duties and round-trip transportation." Including key parts such as automobile chassis, oil pumps, hydraulic parts, and engines, a large part of Sany Heavy Industry was previously purchased from the United States and Germany. According to relevant statistics, in 2010, Sany Heavy Industry, Zoomlion and Sunward, the three major domestic construction machinery manufacturers, purchased 18.3 billion yuan, accounting for 28.5% of their total parts procurement; Among them, nearly 6 billion yuan of chassis and 4.6 billion yuan of hydraulic parts came from abroad.

Sany's "whole industry chain" layout allows it to obtain some cheaper and more secure parts from China. According to the information of China Construction Machinery Business Network, as of the end of June this year, Sany Heavy Industry has four parts subsidiaries, involving the production of hydraulic parts, concrete pipelines, castings and structural parts, and electronic control systems.

Aftermarket is another W* card. In each machine, the equipment manufacturer has installed GPS, and the real-time detection of its working status through the satellite remote monitoring system is Sany's first innovation. Once the machinery fails, Sany can quickly locate it accurately and find the nearest service vehicle and the required parts warehouse. At the same time, information such as "which engineer rushed to the scene, mobile phone number, and expected time to arrive" will be transmitted to the customer in real time. The service engineer is required to complete the task within 24 hours.