Li Guiping, Chairman and CEO of CIMC Vehicles recently shared the company’s practical experience in three aspects: the use of ‘Star-Chained Plan’ to deal with intensive domestic competition, the prologue to the third venture, the new development pattern of the third venture.
1. The Star-Chained Plan to deal with intense domestic competition
The Star-Chained Plan reshapes the hard and off strengths in the product domain, restructures the marketing organisation, and builds productive services to break through homogenised competition and form differentiated competitiveness.
Hard strength is often related to technology and is tangible, while soft strength is intangible but equally important for a company’s development. A good CEO should value both hard and soft strengths equally. According to Guiping, hard strength includes equipment installation, order production, product delivery, while soft strength includes organisational readiness, excellent marketing readiness.
2. The prologue to the Third Venture – the Star-Chained Plan
Star-Chained Plan integrates the resources of seven domestic semi-trailer manufacturing plants, aiming to enhance market share, sales volume, and operating profit, and ultimately improve profitability through high production efficiency, short delivery cycles, and strong brand marketing.
The vision of Star-Chained Plan is to reshape the business model and organisational structure of semi-trailer production and sales in line with the standards to new quality productive forces. The core evolution is reflected in shifting from customised trailers to modular-design; transitioning from internal competition to internal collaboration; and moving from order-based production to product-driven sales.
This evolution involves procurement, production, logistics, local manufacturing in the market and sales. The Star-Chained Plan is the primary initiative under CIMC Vehicles’ third venture journey over the next eight to 10 years. It will have a profound impact on the company’s core competitiveness, including its customers, employees, society and the environment. More importantly, it will affect performance and capabilities. Within CIMC Vehicles’ sales team of 500 people, we have maintained a stable headcount, yet the average sales performance per person has increased by 30 per cent. Amid the widespread trend of pay cuts, the income of sales personnel has risen by 30 per cent proportionally.
3. The new development pattern of the Third Venture
The Star-Chained Plan marks CIMC Vehicles’ Third Venture. The first venture began in 2002, and within just seven years, CIMC Vehicles achieved explosive growth, with revenue increasing from 50 million in the first year to 9.0 billion in the seventh year, mainly from the domestic market.
The second venture started in 2010, shifting the core business focus from domestic to intercontinental operation, utilising a dual-production model to manufacture semi-trailers and refrigerated trailers in North America.
During this phase, the output value in overseas market significantly increased, with two acquisitions completed. We also conducted two IPOs within three years, and since 2012, we have been distributing dividends to our shareholders every year.
After more than two decades of development, CIMC Vehicles has established advantages in market resources and the governance structure of a publicly listed company. However, like all other Chinese manufacturing companies, it is currently facing a severe situation where the high growth rate of the domestic market has rapidly declined.
In addition, the management team that participated in the first two ventures has aged, and their thinking is facing significant bottlenecks.
Looking ahead, CIMC Vehicles will, on the basis of stabilising the ‘intercontinental operation, local manufacturing’ foundation, fully implement the Star-Chained Plan, create new quality productivity, promote structural changes in production organisation, and establish competitive advantages in markets, brands, capabilities, resources, talents, and organisations, leading the Chinese semi-trailer industry into a new development pattern and actively exploring new overseas growth spaces in the global south market
In other news, CIMC Vehicles aims to double its profits for 2025.
