International engine giant advances into remanufacturing market

When China's engine remanufacturing industry is still in turmoil, the international engine giants have been unable to hold back and have to make strides into the just-started market. There are Caterpillar in North America - one of the world's best remanufactured auto parts companies; Cummins - the world's largest independent engine manufacturer. Although domestic consumers are still skeptical about auto parts remanufacturing products, the giants are still “obstinate” to replicate their successful experience in China.

New profit growth point

Recently, Caterpillar's subsidiary Caterpillar (China) Investment Co., Ltd. signed an agreement with Yuchai Co., Ltd. to establish a joint venture to provide Yuchai diesel engines and components and parts of Caterpillar diesel engines and components. Remanufacturing services.

Cummins acted earlier. In February last year, Dongfeng Cummins and the United States Cummins signed a cooperation agreement on remanufacturing projects. Recently, Cummins China’s new leadership team officially unveiled in Beijing today, and remanufacturing projects were again highlighted. In delineating the strategic blueprint for future development in China, Cao Side, the new head of Cummins China, said that Cummins will continue to develop new products and technologies that meet the most stringent emission regulations and put energy-saving emission reduction goals into practice. The most important one is to promote the remanufacturing industry technology. According to Cao Side, Dongfeng Cummins has been one of the first batch of remanufactured industrial bases that have obtained state approval. It is forming a large-scale remanufactured circular economy industrial chain, and the first phase will form an annual production capacity of 10,000 remanufactured engines.

Of course, for the establishment of remanufacturing bases, the two have different experiences and original intentions. In 2008, Caterpillar established the third global remanufacturing center in Shanghai, covering an area of ​​25,000 square meters. In the first half of 2009, Caterpillar also established remanufacturing and recycling points for consumer terminals in Shunde and Chengdu. However, its promotion of remanufacturing business in China is not smooth. As a remanufacturing business accounted for nearly 4% of the global turnover, Caterpillar eventually chose to cooperate and cooperate with local companies to promote the development of this business. The remanufacturing base of Dongfeng Cummins is more on the basis of the original cooperation to seek new profit growth points.

However, the same thing is that the two remanufactured companies will "copy" the foreign remanufacturing model. Caterpillar is a global leader in remanufacturing technology, recycling more than 100 million pounds of scrap iron each year, primarily for remanufacturing engines, transmissions and hydraulic components. “We look forward to sharing Caterpillar's expertise in remanufacturing with Yuchai to provide customers with sustainable, lower-cost solutions that will ultimately serve the purpose of developing this new market.” Caterpillar, who is responsible for the remanufacturing business Chief Steve Fisher said.

Cummins of the United States will provide engine remanufacturing technology to Dongfeng Cummins to support the development of Dongfeng Cummins' remanufacturing industry. Liu Xiaoxing, vice chairman of Cummins (China) Investment Co., Ltd., said that learning, introducing, and borrowing Cummins remanufacturing technology, standards, recycling systems, and management experience will contribute to the healthy development of Dongfeng Cummins' remanufacturing business.

The biggest dilemma is no "raw material"

According to an authoritative forecast, China's current remanufacturing market has an annual size of approximately US$10 billion, which is much smaller than the remanufacturing business of an international parts giant. In the end, what are the problems with the remanufacturing of China's engine and other auto parts? The reporter recently interviewed relevant persons of the Dongfeng Cummins remanufacturing project. According to them, in October last year, China’s circular economy expert group visited Dongfeng Cummins. The content of communication with experts is mainly centered on the difficult issues of the current promotion of remanufacturing, including the difficulty of social user identification. Due to the traditional old concepts and related inaccurate publicity, a considerable number of engine users in the society still lack the necessary knowledge and understanding of the performance, efficiency, and after-sales service of the recycling machine. In addition, the country has not yet unified the logo of the regenerators, and there is no uniform quality standard, causing users to worry about whether to use the regenerator, wait and see, and low recognition. In this way, over the years when social vehicles were scrapped, they formed the status quo that scrapped five major assemblies can only be sold to local scrap car dismantling companies, and they did not dare to sell directly to remanufacturing enterprises, resulting in the “raw material” source of remanufactured enterprises. The channels are monotonous, and the available resource channels are limited. Many available resources cannot be recycled in a timely manner, resulting in the waste of social resources.

In an interview with reporters, it was found that most of the remanufacturing companies had the same problems. Therefore, many companies suggested that the state should increase its efforts in supporting the development of remanufacturing enterprises. The first is to increase policy coordination and propaganda. The second is to strengthen the management of the industry's centralized management. Eliminating re-manufacturing barriers among enterprises and implementing self-discipline in the industry are important prerequisites for ensuring the healthy development of remanufactured enterprises. The third is to increase support for preferential policies. The fourth is to increase market supervision. The state should organize the construction of a relatively complete domestic self-regulation, public opinion supervision, and corporate participation in the domestic remanufacturing supervision system as soon as possible.

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