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Why are there so Many Cummins Factory in China ?

Mar 2, 2022 | Global Companies in China | 0 comments

Cummins introduced the H-type engine in 1933.  The engine was powerful enough to meet the needs of the transportation industry, and it became Cummins’ most successful engine line.  At the same time, Cummins hired good executives, including John Niven, an experienced manager; Paris Lightsinger, who created Cummins’ customer – and agency-oriented marketing system;  V.E. McMullan, who modernized the company’s operations;  Joseph Elvin Miller, great nephew of Mr. Elvin, has been managing Director of Cummins since 1934.  During the next 40 years, Mr. Alvin Miller led Cummins to become a well-known international company.  With high-quality products and a unique nationwide service system, Cummins made its first profit in 1937.  In 1940, Cummins introduced the first 100,000-mile warranty service in the engine industry.

An International Brand Started in A Mill

Let’s turn the pointer back to 102 years, when the founder, Clacy Cummins, was just a driver for banker William Owen, obsessed with the charm of diesel engines, in 1918, after work He rented a 5,000-square-foot warehouse at a grain mill in Indiana for research.

Maybe it was because of Clacy’s spirit of hard work that moved William, or maybe it was because William simply thought Clacy drove well. With financial support, Cummins was formally incorporated in Columbus, Indiana, USA.
In the following ten years, with the support of William Owen’s stable financial resources, Cummins continued to expand and consolidate its position in the field of diesel engines:
In 1924, Cummins’ first self-designed direct-injection engine, the F-type engine, began production; in 1928, the U-type engine began production, marking Cummins’ official entry into the field of automotive power; in 1929, the single-disc fuel system came out, Provide injection pressure for diesel engines, which can be understood as the early high-pressure common rail; in 1929, the K-type engine began to run, mainly for industrial, fixed equipment and offshore markets; in 1932, H672 began production, which made Cummins completely open up North American commercial trucks market gate.

Despite William’s supporting, Cummins didn’t turn a profit for the first time until 1937, after hedging against high product development costs, meaning they had been losing money for the previous 18 years.
After starting to make a profit, Cummins chose to pursue the victory. Through a series of marketing methods such as the establishment of a diesel worker union, a replacement of a more recognizable brand logo, and a public offering, Cummins’ market share and revenue continued to increase.

In 1958, Cummins opened its first overseas factory in Scotland, and its origins with China began at about the same time.
In wartime fish and water is the foundation of marriage
Speaking of the first contact between Cummins and China, it goes back to before the founding of New China.
On March 11, 1941, due to the signing of the Lend-Lease Act, a large number of patrol boats and military trucks equipped with Cummins engines began to be introduced into China; in 1944, after enjoying the nourishment of high-horsepower engines, Chongqing began to covet Cummins technology. , and issued a letter of intent to seek cooperation, but due to well-known reasons, the cooperation can only be postponed.
The first contact between Cummins and China came to an abrupt end, and it has been 30 years since the second contact between the two.

In the 1970s, China had just established diplomatic relations with the United States, ending the abnormal state of In terms of production and transportation, Cummins is also one of the first American companies to conduct business in China since the reform and opening up.

Soon, the mining trucks equipped with Cummins high-horsepower diesel engines were widely loved by the workers at that time, and even reached the point where they would not work without Cummins, and they all begged their superiors to increase purchases.
But is it really as simple as the workers think?
We all know that the price of imported products has always been relatively high. If the import volume of Cummins engines is increased, it will undoubtedly increase the additional burden on China, which was at the beginning of opening up and had tight foreign exchange.
However, the advantages of the Cummins engine are obvious to all, and it coincides with the early stage of reform and opening up, so the Chinese side boldly put forward a request to Cummins to introduce technology and realize localized production.

On January 25, 1981, under the mediation of the governments of both sides, as a key import project in the engine field in China’s sixth five-year plan, Sinotruk and Cummins signed a technology introduction agreement for related products, and the subsidiary of Sinotruk. Chongqing Automobile Engine Factory began to produce Cummins 10-50 liter high-horsepower diesel engine products, which is also the first official cooperation between the two.
So far, China has finally brought Cummins, the “foreign daughter-in-law” home, and the dowry it brought has also provided a lot of help for the development of China’s engine business in the later period.

The Cummins Department is Blooming in China
Dongfeng Cummins DCEC

The first to find a foreign daughter-in-law was the Dongfeng Second Automobile.
It may be because of the closely between Hubei and Chongqing. After seeing that the Chongqing Automobile Engine Factory started to produce Cummins products and gradually realized profits, FAW began to wonder if it could follow their example and expand its business.
In 1984, the Second Automobile Group decided to introduce the B/C series medium-horsepower (3.9-8.3 liter) engines that Cummins had just released for a year. I guess, it just wanted to replenish blood for itself, who had just ended years of losses.

Two years later, on November 15, 1986, FAW decided to strike while the iron was hot and signed a B-series diesel engine product and manufacturing technology license transfer contract with Cummins in the Fujian Hall of the Great Hall of the People.
On June 30, 1990, the first Cummins B-series engine was successfully rolled off the production line at Dongfeng Diesel Engine Plant, which also made the later pillar product of the Second Automobile Group—Baping Chai EQ153 gain a strong heart, and take this as the foundation. He earned the reputation of “plain little plane” by himself.
Although the cooperation between the two has gone through more than ten years, the real joint venture was still in June 1996.

At that time, it was because the production technology license of the B-series engine was about to expire, and FAW did not want to lose Cummins as a good partner because of the big sale of Baping Diesel. The contract expands the scope of cooperation.
Today, Dongfeng Cummins has an annual production capacity of 214,000 units, mainly producing Cummins B, C series mechanical and ISDe, ISLe, ISZ series fully electronically controlled diesel engines, capable of producing 4.5-13L engine products with a power coverage of 103- 412kw (140-560 hp).

Chongqing Cummins CCEC

Let’s go back to 1993, when Cummins’ business sales in China reached an astonishing 160 million US dollars, which means that China became the third largest Cummins after the United Kingdom and Canada. Overseas markets have also stimulated Cummins’ confidence in continuing to develop the Chinese market to a certain extent.
In order to seek stability, they found the Chongqing engine factory that they had cooperated with for the first time. Both parties planned to continue to expand the production scale: on the one hand, China hopes that the high-tech of international brands can be more solidly localized production; on the other hand, Cummins hopes that the Chinese market can bring them greater benefits.
In this way, the two parties completed another cooperation signing with their own reasons – in October 1995, Cummins and China National Heavy-Duty Truck officially signed the “Chongqing Cummins Engine Co., Ltd.” joint venture contract in Beijing.

If the introduction of production in 1981 counts as a love affair, then this joint venture is even a formal marriage license. Chongqing Cummins is also the first engine factory in China to establish a joint venture with Cummins, which gave the Second Automobile a good start at that time.
Chongqing Cummins mainly produces high-horsepower and large-displacement engines, including heavy-duty high-horsepower engines and generator sets with a displacement of 11-50L, with a power range of 175-2000 horsepower. Has a good market share.

Xi’an Cummins XCEC

Entering the 21st century, Cummins has also accelerated its own “localization” process.
On December 16, 2005, Cummins’ third joint venture engine plant in China, Xi’an Cummins Engine Co., Ltd., was registered and officially put into production in August 2007.

Xi’an Cummins is quite special. It does not have as many products as other joint venture companies, but only produces ISM11 and QSM11 series fully electronically controlled diesel engines. Friends who don’t know it will definitely think that Cummins has begun to care for itself and refuse to give technology to Xi’an Cummins. .
But the truth of the matter is that the Cummins ISM 11L fully electronically controlled heavy-duty diesel engine is positioned as the flagship power of Europe and the United States, which you can understand as their high-end products.
Moreover, Xi’an Cummins is the first overseas production base of this “flagship” engine outside North America. In my brother’s opinion, Cummins’ arrangement is like a master teaching a disciple to let you learn slowly, rather than making money all at once.
At present, the plant’s engine products are widely used in heavy trucks, medium and high-grade passenger cars, construction machinery, generator sets, ship power and other power equipment.

Xi'an Cummins


It is followed by Beiqi Foton.
On October 19, 2006, Beiqi Foton invited Cummins to the Diaoyutai State Guesthouse in Beijing. Such a high-level courtesy was naturally to sign the joint venture contract of “Beijing Foton Cummins Engine Co., Ltd.”.
After two years of preparation, Foton Cummins was officially established on March 26, 2008, mainly responsible for the production of light, medium and heavy diesel engines, with an annual production capacity of 520,000 units.

In 2010, the Foton Aoling CTX equipped with an ISF3.8L engine and the Foton Aumark C280 equipped with an ISF2.8L engine were launched one after another. Everyone is proud of being able to drive light trucks equipped with Foton Cummins machines.
Although in the field of light trucks, Foton Cummins ‘s light trucks have a high installation rate and a good reputation, but it is undeniable that in terms of heavy trucks, Foton Cummins is not particularly popular.

For example, the Weichai machine of Foton Auman has just been put on the market and has been well received by users. However, after the ETX, GTL and other models were installed with Fukang in the later period, evaluations such as fast breaking and difficult driving came in, which led to the final failure of this classic model. Got a bad reputation.
At present, Foton Cummins mainly produces several engines including F series 2.8L, 3.8L light engine, F series 4.5L medium engine and G series 11L, 12L, X series 12L heavy engine, etc. If it wants to be in the field of commercial vehicle power To go to the next level, the in-depth research on heavy-duty machines is indispensable.

Guangxi Cummins GCIC

On June 27, 2012, Cummins’ “localization” extended to the southwest of China – Guangxi Cummins was officially registered and established in Liuzhou City, Guangxi Zhuang Autonomous Region, mainly producing 6.7L and 9.3L diesel engines for engineering.
Guangxi Cummins is an engine enterprise jointly established with Guangxi Liugong Machinery Co., Ltd. It is positioned as an exclusive diesel engine manufacturer for construction machinery, and is also one of the largest non-road engine production bases in China.
Since the product has not been involved in the field of commercial vehicles, the presence of Guangxi Cummins has not been very high.

Anhui Cummins ACPL

Finally, let’s talk about the youngest Cummins joint venture company – Anhui Cummins.
In May 2018, Cummins signed a transaction document with JAC and Navistar. Navistar transferred 50% of the equity in the original joint venture with JAC to Cummins; then on December 26, the original JAC The Navistar joint venture company was officially renamed and registered as Anhui Cummins Power Co., Ltd.

It is worth noting that after Anhui Cummins took Hefei Engine Factory into the bag, the Anhui Cummins products currently available on the market are basically the previous 2.7L Ruijiete engine and 2.8L Isuzu engine. In fact, this is not difficult to understand. After all, research and development Absorption also takes time.
In the future, Anhui Cummins will further expand for the China VI market based on the previously introduced Cummins B series products, and strive to stand out among many Cummins series.
In addition to the six engine factories mentioned above, Cummins has also opened many parts factories in China, and China has become its largest overseas market.
“1994, Shanghai Fleet Processing Plant (joint venture); 1996, Wuxi Turbo Technology Plant (joint venture); 2000, Coors Lubricants Shanghai (joint venture) 2006, Cummins Shanghai Filtration System Plant; 2006, Wuxi Van Nievele Plant (joint venture); 2007, Cummins Wuhan Fuel System Plant;”

Cummins is More than Just an Engine Brand

There are two main reasons for the popularity of Cummins. One may be because of the historical background such as the Lend-Lease Act, which made the Chinese people in wartime feel the charm of high-horsepower diesel engines in advance, which was planted in the hearts of people at that time. Seeds that desire to own their products.
The second and most important point is that the joint venture of Cummins does not give you the eliminated technology like Mann did, but really treats you like a “married daughter-in-law”. In addition to the most core technology, Both sides play similar things, and develop and progress together.
Finally, to borrow the words of Brett Merritt, vice president of Cummins’ road engine business, as the end: “Cummins does have unique features in the Chinese market. The platform creates synergies, customizing and developing different functions and performances according to the needs of different OEMs, markets and end users, maximizing the use of scale advantages, and ensuring that different OEMs get products and solutions tailored to them.”

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