Winning Global Customer Respect with Strength
— Speech at Shandong Heavy Industry Group • Weichai Power 2024 Global CEO Conference
Tan Xuguang
(February 4, 2024)
Esteemed global CEO colleagues, ladies and gentlemen, friends:
Today, on the Chinese lunar calendars Beginning of Spring, we gather here for the fifth Global CEO Conference of Shandong Heavy Industry Group • Weichai Power. We have traversed an extraordinary four years, confronted the global pandemic, and today, we are finally reunited in Weifang! First, I extend a warm welcome to all friends and colleagues attending the conference!
Today, the topic of my speech is "Our Strength . World Customers Respect".
Twenty years of bilateral efforts. Together, we have created remarkable achievements in the global industry.
On August 11, 2005, with the strategic restructuring of Xiang Torch by Weichai Power as a milestone, the group embarked on a new chapter of major transformation, integration, and acceleration of domestic and foreign industries. In these twenty years of storms and challenges, the CEO teams at all levels, through joint efforts, have overcome global storms, traversed chilling industry cycles, won numerous hard-fought battles, conquered challenging tests of cultural integration, and showcased dazzling global achievements. We have laid down an incredibly bright path of global "competition and cooperation," friendship, and soaring development!
- Over the past 20 years, we have focused on our core business, leading in proactive transformations across six major sectors. Creatively, we have constructed a globally unique industrial model. Starting from a single engine, we pioneered the creation of the golden power assembly globally, expanded into commercial vehicles, agricultural equipment, construction machinery, smart logistics, and marine transportation. We have explored a distinctive reverse integration methodology, realizing five major strategic transformations: from a power system single-core support to the industrial structure transformation led by complete vehicle and complete machine industry; from investment-driven elements to endogenous dynamics led by technological innovation; from dependence on strong cycles to the development path of resilient counter-cycles; from competition in the mid-low end to the competition mode of high-end value escalation; from the dominance of domestic systems to the precise configuration of globalized resources! We created a miraculous development, with a 60-fold increase in revenue over 20 years and a compound annual growth rate of 22%.
- In the past 20 years, we pioneered international expansion, transforming into a respected international multinational group. With a fervent dream of going global, we set sail from Weifang, progressing relentlessly. Starting from scratch, facing storms, we have ventured globally. We have keenly seized new opportunities during global crises, continuously discovered new territories in the great navigation, and strengthened strategic engines through open cooperation. With a superlative global perspective, strategic intelligence, and artistic struggle, we accurately grasped strategic opportunities. We successively implemented strategic cooperation with 11 high-tech enterprises such as Baudouin in France, Ferretti in Italy, KION in Germany, Linde Hydraulic, and PSI in the United States. In 2023, the groups overseas industrial revenue exceeded RMB 100 billion for the first time.
- In the past 20 years, we leveraged industrial resources, burnished global high-end brands, and fulfilled our vow of "If we dont aim for the top, then we are merely muddling through". Strategic integration has enabled us to form powerful industrial superimposed effects, brand cluster effects, and value multiplication effects, providing global customers with integrated product service solutions. We established unbeatable leading advantages in key business areas. The groups heavy-duty trucks, heavy-duty engines, and heavy-duty transmissions rank first globally. SINOTRUKs single-brand exports rank first globally, Weichai industrial power equipment sales rank among the top three globally, Shantui bulldozer sales rank first in China and second globally, Lovol Smart Agriculture tractors and harvesting machinery rank first in China, Italy Ferretti luxury yacht brand ranks first globally, and KION Group industrial forklifts rank first in Europe and second globally.
- In the past 20 years, we have embraced open sharing, collaborative synergy, and deepened the exploration of boundless industrial opportunities, bringing unimaginable strategic value to all partner enterprises. After strategic restructuring, all companies underwent earth-shaking changes. The fundamental reason lies in the full support and industrial synergy provided by the group. Over the 20-year period, Shaanxi Heavy Duty Automobiles restructuring has resulted in a 12-fold increase in truck sales; SINOTRUKs reform and restructuring over 5 years has elevated it to the top of the Chinese industry; Weichai Powers alliance with Lovol has doubled its sales within 3 years; the strategic collaboration with KION for 12 years has seen it grow into a global leader in intelligent logistics system solutions, with a doubled operating income; Ferretti has successfully listed in both Hong Kong, China and Milan, Italy, once again shining as the "Crown Jewel" of the yacht industry worldwide. Practice has proven that all our collaborations are strategic, long-term, value-oriented industrial investments, aimed at collectively strengthening the global core competitiveness of industries, and every collaboration has achieved 100% profitable success!
- Over the past 20 years, we have deepened communication, embraced mutual understanding, and built a model of cross-border, cross-cultural integration for mutual success! This is the most successful experience and the greatest achievement of the past two decades. We respect cultural differences, market rules, and commercial principles. Through constant adaptation during challenges, fostering resonances through clash of ideas, and reaching consensus through cultural conflicts, weve ensured that every collaborating company fully enjoys the value of the groups culture! "I want to keep all the employees of France Baudouin!", "I want to settle all the historical debts of the pre-restructuring PSI employees in the United States!". The commitments made at the beginning of the restructuring have erected a ladder for the integration and development of both sides. Throughout this process, CEO teams and union organizations at all levels have played an important exemplary role. We have overcome differences, doubts, and opposition with mutual respect, appreciation, tolerance, and mutual achievement, earning us understanding, recognition, and respect!
Reflecting on the 20-year global cooperation journey, we deeply understand that the mega-group forms a community of shared destiny where you are in me, and I am in you, and everyone doing well together is the real success. Today, we not only have industry equity relationships that are difficult to sever, but also have strategically linked partnerships, blood-bonded brotherhood, and a cultural symbiotic relationship with shared honors and disgraces! A common "big family," common customers, common dreams, and common happiness are our greatest concentric circles, the best marriage lines, and the strongest centripetal force!
What makes us even more proud and delighted is that in the just-concluded 2023, we overcame numerous challenges. The groups total revenue exceeded RMB 510 billion, a year-on-year increase of 33%, and profits reached RMB 22 billion, doubling the growth, achieving the most brilliant performance in history. Here, I want to say thank you to all the global CEO teams!
In the next five years, the world economy faces great uncertainty. The trend of geopolitical economic fragmentation is intensifying. Chinas economic development model has undergone significant changes, and stock competition has become the new normal in the domestic market. The new technology "nuclear explosion" represented by artificial intelligence has already ignited, and the irreversible transformation of new energy is accelerating, challenging the traditional industrial competition landscape. The restructuring of the global industrial chain is escalating, and the risks of deglobalization are increasing. CEOs at all levels must be mentally prepared, using a global perspective, strategic thinking, and a systematic approach, combined with their own business, respective fields, and long-term development, to think and answer seriously.
- In the next five years, the power system will remain the groups most significant trump card for participating in global competition, and it must be decisively won! We must continue to expand our presence in the global high-end market, consistently provide the most competitive differentiating advantages for the groups complete vehicles and machinery, maintain the absolute leading position globally, and become the groups strongest engine as it moves towards world-class status!
- In the next five years, the leading role of complete vehicles and machinery must be strengthened, not weakened, and it must be decisively won! We need to accelerate the transformation towards high technological content, expedite the shift towards high brand value, and hasten the transition to high-end markets, becoming a crucial pole in the global high-end equipment industry!
- In the next five years, the transition to new energy is an unavoidable "life-and-death battle" that must be decisively won! We must ensure that new energy vehicles reach a world-class level, guarantee that new energy power systems lead globally in technology, and ensure that we consistently stay at the forefront of the energy revolution, constructing an unbreakable technological fortress in the era of new energy!
- In the next five years, artificial intelligence is the hundred-meter sprint for reconstructing competitiveness, and it must be decisively won! We need to accelerate the global layout of the AI new technology engineering system, expedite the deep application of artificial intelligence in all business scenarios, and accelerate the AI revolution to lead changes in group thinking, research and development models, and management models, enabling the group to soar with the wings of intelligence!
- In the next five years, the global businesses will complement each other, laying the strategic foundation for development of a group to a trillion-dollar company, so it is a must-win competition! It is necessary to ensure steady growth of global industries at a high level, promote breakthroughs in global markets with high quality, achieve the synergy of the groups businesses and jointly create value for customers!
To build a world-class enterprise, an excellent CEO team is absolutely necessary. CEOs at all levels should be tech-savvy, have strategic-thinking, understand products, manage to operate, and be good at communication. Here are four traits I want you to have.
1. Be a crazy dreamer, dare to challenge the impossible.
A great CEO should be a visionary, who has great ambitions to overturn the industry and change the world, a forward-looking vision and a global perspective, who never gets satisfied and always be passionate for improving, and even more importantly, tries its best for dreams. Over the years, we have tirelessly made efforts to build, to pursue and to realize our dreams and finally make them come true. We have made some achievements, for example, in 2002, we proposed to make engines into Intel chips, and now we are leading the internal combustion engine industry to the worlds top for the third time. In 2005, we envisioned engines growing legs and sprouting wings, and today, we have formed an "aircraft carrier fleet" that is unique in the world. In 2012, the Italian Ferretti Group was in struggling on the edge of death, but now it is unquestionably a global leader in luxury yachts. In 2018, we set a goal to transform SINOTRUK into a top-tier group for commercial vehicles of whole series within 3 to 5 years, and today, we have made it the number one in China. History has proven that there is nothing we cannot achieve if we dare to dream. Dreams have the power to change the world! Only with dreams can we have endless motivation and a promising future!
2. Be a product engineer, proficient in your field of expertise.
An outstanding CEO must be a product expert and technology expert in their industry. Put every focus on product. Only we know the products, can we not be fooled; only we master the technologies, can we make the right decisions. CEOs at all levels must possess the spirit of lucubration and persistence, delve into products and business, gain deep insights into global industry trends, maintain a keen sense for technological changes, and scientifically guide the innovation of company products, to ensure everlasting competitiveness and stay at the forefront of technology. All our work is centered on products, and those who do not understand products or technology cannot assume the role of CEO!
3. Be a super fighter. Only by prioritizing career over life can we move towards world-class status.
An outstanding entrepreneur must have his mind filled with his business and enjoy the process of achieving great success, then his company would undoubtedly become the worlds number one. I have repeatedly told the young friends from Weichai that "the moon wont give you a piece of candy, and the sun wont give you an award.", because success is impossible without making efforts. To succeed, you must have the spirit of dedicating to the company, the willingness to work harder than others, to risk everything, and to work twice as hard as others. Without such spirit, mindset, and ability, it is impossible to achieve great success or enjoy the happiness of success!
4. Be a culture guider to lead employees in the global family always working together in harmony.
Corporate culture is the culture of entrepreneurs, that means the words and actions of CEOs at all levels present the "most vivid values. Therefore, we should be open-minded and communicate with team members without barriers, to reach a high level of consensus through our collision of ideas. We should be open and inclusive, regularly communicate with the group headquarters and brother enterprises, make good use of the groups resources, and absorb the nutrients of the groups excellent culture. We should lead by example, set an example for employees, and have the trust, recognition, and support of the team and employees. CEOs at all levels should be disseminators of corporate culture to tell the cultural stories with different languages and joint actions, to enhance our friendship and amplify the value of collaboration with culture!
Fellows!
Customers are always our "boss", and it is our common pursuit to create greater value for them. We should impress them with our products, serve them with sincerity, and win their respect with our strength!
Fellows!
It is our shared responsibility to make 150,000 employees worldwide happy. We should always care about our employees, reward them with the dividends of development, empower them with large platforms, and warm them with care in every possible way, so that the company can develop in love!
Fellow CEO Colleagues!
It is our common dream to build a world-class enterprise. We should always prioritize the development of the company, be wholly devoted, and maintain passion to achieve new highlights in our careers through hard work, and create a better future through practical actions! We shall always keep it in mind that, "not striving for first place equals to fooling around!"
Thank you!
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