DEUTZ AG: Neue 3-Säulen Wachstumsstrategie in China

  • Joint Venture mit führendem Baumaschinen-Konzern SANY
    Ausbau Servicegeschäft mit HORIZON
    Produktionskooperation mit BEINEI
    Halbe Milliarde Euro Umsatz in 2022 erwartet

Die DEUTZ AG stellt ihren Marktauftritt in China neu auf. Über Partnerschaften mit gleich drei bedeutenden chinesischen Unternehmen – SANY, HORIZON und BEINEI – will die DEUTZ AG an dem dynamischen Wachstumsmarkt in China partizipieren. „China ist der größte Einzelmarkt für Motoren weltweit. Mit den neuen Partnern verfügt DEUTZ nun über ein attraktives Produktionsnetzwerk, um Kunden vor Ort bestmöglich mit Antriebssystemen zu versorgen. Gleichzeitig haben wir Zugriff auf ein großflächiges Servicenetz, das wir mit digitalen Lösungen konsequent weiterentwickeln werden“, sagt DEUTZ Vorstandsvorsitzender Dr. Frank Hiller.

In Peking wurde eine Absichtserklärung (Memorandum of Understanding) mit SANY, dem größten Baumaschinen-Konzern Chinas unterzeichnet. Die beiden Unternehmen gründen ein Joint Venture, an dem die DEUTZ AG mit 51 % die Mehrheit halten wird. In einem ersten Schritt sollen für SANY in 2022 rund 75.000 neue Motoren der Emissionsstufe IV (China IV) bzw. der Abgasstufe 6 (China 6) für Off- und On-Road-Anwendungen geliefert werden. Damit weitet die DEUTZ AG, die zu den führenden Motoren-Herstellern im Off-Highway Bereich gehört, ihre Aktivitäten auch auf den On-Highway Bereich aus. Die DEUTZ AG investiert zum Start in das neue Joint Venture einen mittleren zweistelligen Millionenbetrag.

"Mit DEUTZ haben wir uns für einen weltweit führenden Motorenhersteller entschieden. Bei diesem Joint Venture profitieren wir von einem agilen und zukunftsgerichteten Unternehmen, das technische Innovation aktiv vorantreibt. Damit bringt DEUTZ genau das mit, was wir für unsere Motorenentwicklung brauchen," sagt Lincoln Liang, Mitglied des Vorstands der Sany Gruppe.

Um auch im attraktiven Service-Geschäft stärker präsent zu sein, schließt die DEUTZ AG zusätzlich einen Kooperationsvertrag mit HORIZON. Das Unternehmen ist mit über 80 Filialen der größte Anbieter im chinesischen Baumaschinen-Vermietungsgeschäft und wird zukünftig als lokaler Service-Partner für DEUTZ die Betreuung der Motoren im Feld sowie den Aftermarket-Vertrieb in China übernehmen. HORIZON ist zudem ein idealer Partner im Hinblick auf digitale Flottenservice-Lösungen.

Ein weiterer Baustein der neuen China-Strategie ist eine Kooperation zur lokalen Auftragsfertigung mit dem Motorenbauer BEINEI. Diese wird als Produktions-Hub für den asiatischen Markt fungieren. In einer neuen Fabrik in Tianjin sollen unter der Leitung des DEUTZ-Managements in 2022 rund 20.000 Motoren hergestellt werden.

Die DEUTZ AG hatte im Oktober 2018 die Anteile an dem bisherigen chinesischen Joint Venture DEUTZ Dalian mit First Automotive Works (FAW) verkauft. Die Neuausrichtung ermöglicht jetzt einen grundlegend neuen Marktauftritt, um den steigenden Bedarf nach fortschrittlichen Motoren in China, aber auch in anderen asiatischen Märkten langfristig zu bedienen. Mit dieser 3-Säulenstrategie strebt DEUTZ in China für 2022 Umsätze in Höhe von rund einer halben Milliarde Euro an.1

1 Inwieweit diese Umsätze voll konsolidiert werden, wird noch geprüft.

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DEUTZ AG: New three-pillar growth strategy in China

  • Joint venture with leading construction equipment group SANY
  • Expansion of service business with HORIZON
  • Manufacturing alliance with BEINEI
  • Revenue of half a billion euros expected in 2022

DEUTZ AG is restructuring its market presence in China, entering into partnerships with three major Chinese companies – SANY, HORIZON and BEINEI – in order to benefit from the high-growth Chinese market. "China is the largest individual market for engines in the world," says Dr Frank Hiller, Chairman of the DEUTZ Board of Management. "Thanks to its new partners, DEUTZ now has the ideal production network for efficiently supplying local customers with DEUTZ drive systems. At the same time, we have access to an extensive service network that we will systematically enhance with digital solutions."

DEUTZ and SANY, China’s largest construction equipment group, signed a memorandum of understanding in Beijing. The two companies are forming a joint venture in which DEUTZ AG will be the majority shareholder with a stake of 51 per cent. Initially, the plan is to supply SANY with around 75,000 new engines for off- and on-road applications in 2022. These engines will comply with the China 4 and China 6 emissions standards. One of the leading engine manufacturers in the off-highway segment, DEUTZ AG is thus stepping up its activities in the on-highway segment as well. DEUTZ AG’s initial investment in the new joint venture is in the mid double-digit millions.

"We chose DEUTZ because it is one of the world’s top engine manufacturers," says Lincoln Liang, a member of the Sany Group’s board of directors. "In this joint venture, we will benefit from working with an agile company that is looking to the future and driving forward technological innovation. DEUTZ thus brings to the table exactly what we need for our engine development."

In addition, DEUTZ AG is entering into a cooperation agreement with HORIZON in order to strengthen its position in the attractive service business as well. With more than 80 branches, HORIZON is the largest player in the Chinese construction equipment rental business. It will become a local service partner for DEUTZ, servicing engines in the field and taking over the aftermarket sales business in China. HORIZON is also the ideal partner with regard to digital fleet service solutions.

Another element of the new strategy for China is a local contract manufacturing alliance with engine manufacturer BEINEI. This will act as a production hub for the Asian market. The DEUTZ management team is to oversee the manufacturing of approximately 20,000 engines in 2022 at a new factory in Tianjin.

In October 2018, DEUTZ AG sold its shares in DEUTZ Dalian, the Chinese joint venture that it had entered into with First Automotive Works (FAW). The new strategy now enables DEUTZ to fundamentally overhaul its market presence so that it can meet the growing demand for sophisticated engines not only in China but also in other Asian markets. On the back of its three pillar growth strategy, DEUTZ is aiming to generate revenue of around half a billion euros in China in 2022.

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Further strong growth at DEUTZ

  • Significant rise in new orders
  • Double-digit increase in revenue and significantly improved EBIT margin
  • DEUTZ focuses efforts on growth in China
  • Implementation of E-DEUTZ strategy continues to gather momentum

DEUTZ AG has today published its consolidated financial results for the first three quarters of 2018. New orders rose from €1,173.8 million to €1,548.7 million, an increase of 31.9 per cent. In the third quarter of 2018, new orders were up by 22.0 per cent to €452.2 million (Q3 2017: €370.8 million).

The unit sales figure for the nine-month period was 156,504 engines, including 8,977 electric motors sold under the Torqeedo brand. This equates to an increase of 32.3 per cent compared with unit sales in the prior-year period (Q1–Q3 2017: 118,279 engines). Revenue advanced from €1,093.2 million to €1,297.3 million, a rise of 18.7 per cent. In the third quarter, revenue was up by a substantial 17.0 per cent to €419.7 million (Q3 2017: €358.7 million).

Operating profit (EBIT before exceptional items) amounted to €45.9 million in the first three quarters of the year (Q1–Q3 2017 €26.7 million). Adjusted for effects on earnings in connection with the DEUTZ Dalian joint venture, it stood at €60.3 million. Operating profit thus improved at a significantly faster rate than revenue, despite the strike at one of the Company’s suppliers. Consequently, the EBIT margin (before exceptional items) improved to 4.6 per cent after adjusting for the temporary drag on earnings resulting from DEUTZ Dalian and to 3.5 per cent before adjustment for this drag on earnings (Q1–Q3 2017: 2.4 per cent). In the third quarter of 2018, the EBIT margin was 3.0 per cent (Q3 2017: 1.4 per cent).

“The strike at a supplier put a great deal of strain on management and staff at our Company,” says the Chairman of the DEUTZ Board of Management, Dr Ing Frank Hiller. “This makes our substantial revenue growth, to which all regions and segments contributed, and our significant increase in operating profit all the more pleasing. We took further important steps that are aimed at securing growth in the future. We have also succeeded in further expanding our licensing business in China and are making good progress with the implementation of our EDEUTZ strategy.”

In the Chinese market, DEUTZ plans to generally reorganise its presence so that it can generate stronger growth and be even more successful there. As previously announced, DEUTZ signed contracts for the sale of the former DEUTZ Dalian joint venture to its former partner FAW in October 2018. The Company is also currently in talks about entering into new alliances with major local partners in the construction equipment and agricultural machinery industries.

Our E-DEUTZ strategy, introduced in 2017, is continuing to gather momentum. Demonstrating fully working operational systems during the ELECTRIP Event Week was the best way to prove our expertise in this field. An interdisciplinary team of Torqeedo and DEUTZ design engineers succeeded in integrating our drive concept into two prototype machines in just six months. This shows that DEUTZ has mastered the technology and is in a position to supply marketable electrification solutions.

For 2018 as a whole, DEUTZ (assuming no further supply shortage) expects revenue to rise sharply to more than €1.6 billion. The EBIT margin (before exceptional items) is forecast to improve to at least 4.5 per cent.

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Westernacher China celebrates a decade of success

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  • Westernacher looks at its achievement in China over the last decade
  • Westernacher expands service offerings and footprint in China
  • Further sustainable success planned for the next decade

Global consulting company, Westernacher Consulting, celebrates the 10th anniversary of its presence in the Chinese market. This milestone marks a decade of Westernacher being a trusted business and innovation partner in Asia.

Founded in September 2007, Westernacher China has come a long way – from providing a handful of services for foreign companies, to a broad offering for numerous local and international customers today. As a pivotal office in the Far East, Westernacher China has been expanding possibilities not only for mainland China, but also for the whole of the Asia Pacific region, helping customers innovate and grow.

"Ten years ago, we decided to set up an office in Shanghai when we saw the growing importance of China for our customers." Westernacher global CEO, Benjamin Dewilde, continues: "At that time, our customer’s main focus was on manufacturing in and exporting from China, and then increasingly also on targeting the local Chinese market. Local consumption was starting to take off," says Dewilde. China is the largest country in the world in terms of population, with extremely high growth and a rapid pace of modernization and innovation. He adds, "we felt that China would become one of the most important areas of innovation sometime in the future. Due to very high volume here, you must handle everything much more efficiently. At the same time China was leap-frogging over old ways of thinking and coming up with its own solutions. Since we want to be the forerunner of innovation, it was important for us to be there and be part of it in order to bring it to our customers." 

Journey to success

According to the Consulting Unit Lead of China, Dr. Guenter Dortmann, Westernacher China has not only grown very rapidly in size, but has also expanded its service offerings from SAP ERP consulting to Supply Chain Management and business consulting. In the first year when the subsidiary was founded, Westernacher China targeted German manufacturing companies which had facilities in China, primarily in the ERP area. In 2008, Westernacher started to invest in building SAP EWM warehouse system implementation services. Since then, this area of our practice has been growing exponentially and Westernacher is now the top SAP Supply Chain Management implementation partner in China.

Westernacher China has served many renowned companies, such as Weir Minerals and Federal Mogul in multiple projects. Westernacher China has also become a strong player serving local companies and joint ventures in a number of key industries. In the automotive industry, these include FAW-VW, Dongfeng Nissan and Skoito. Top names in the retail/consumer products industries include Xtep, Jomoo, Deli and Manwah. "All of these companies chose Westernacher as their business partner owing to the recognized expertise of our consultants, the long-track record of successful rollouts and implementations, the service partnership with SAP China and last but not least, an excellent reputation in the Chinese and Asian markets," explains Dr. Dortmann.

Today, Westernacher China is a crucial delivery hub, supporting Westernacher’s business in the Asia-Pacific region. 

"Westernacher China today is the most important SAP EWM implementation partner in China and the whole of Asia Pacific, with most of the EWM implementations in this region," says Dortmann. He explains, "our warehousing experts can implement any kind of warehouse, from manually to fully automated warehouses in different industries, starting with production, trading warehousing to distribution centers." In addition to being a leader in warehousing solutions throughout China, Westernacher also implemented the first S/4HANA simple finance systems there, as well as two live SCP TM implementations.     

The go-to innovation partner in China

As a worldwide consultancy, our very strong local team of experts in China makes Westernacher much more attractive to its global customers. "Most companies, who we help to optimize their processes, have global supply chains, with a large component in China," Dewilde says, adding that implementations must be carried out in China to optimize and automate those supply chains.

"It’s vital for many of our international customers to have a strong and experienced partner in China and we have built a customer portfolio of impressive Chinese customers. As a group we benefit from the experience and innovation from our Chinese projects and customers," Dewilde notes. "Maybe the most satisfying aspect of our track record in China is the fantastic team of great colleagues and friends who have enriched our group. They bring unique expertise and perspectives to our global team."

Looking to the future

In the decade to come, the group’s global CEO expects to stay number one in warehousing in China, to expand in transportation management, digital supply chain management and planning, as well as become a top player in the S/4HANA space in industries such as automotive supplies, pharmaceuticals and IoT. Westernacher is set to expand geographically, anticipating more business in Taiwan and neighbors such as Japan and South Korea.

On the other hand, Dortmann also expects further growth for Westernacher China in the existing business consulting areas in China. For Westernacher customers worldwide, China’s dedicated Application Management Service team, together with the global Westernacher AMS team, can deliver 24/7 Help Desk services to support the day-to-day operations of any SAP system. "We’ll also invest more in growing the SCM business management consulting activities and eCommerce," explains Dr. Dortmann.

Westernacher China looks forward to the next decade of expanding and remaining the top trusted name in innovative business and IT consulting in China.

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