Cummins China plans to achieve sales of 2.3 billion US dollars in 2008

Time and number coincidences often spark curiosity and reflection. In 1986, Cummins’ global sales revenue reached $2.3 billion. Remarkably, this figure was the exact target Cummins China aimed to achieve in 2008. On July 18, 2008, Wang Hongjie, Vice Chairman of Cummins (China) Investment Co., Ltd., shared during an exclusive interview, “Including joint ventures in China, by 2010, Cummins’ sales in the Chinese market will surpass $3 billion.” When Wang first joined Cummins, the company’s sales had grown 30 times. Wang Hongjie, now 62, began his journey with Cummins in 1994. At that time, the company had no joint venture in China. Its operations were divided into three main areas: mining vehicles, technology transfer and licensing agreements with Dongfeng and Chongqing, and the production and sale of certain spare parts and generator sets. “At that point, annual sales exceeded $100 million, and the Beijing International Trade office had only six employees,” he recalled. Today, with the establishment of joint ventures, Cummins employs over 6,000 people in China, and its Beijing headquarters has more than 750 staff. Cummins has built a nearly fully localized team in China, with approximately 40 foreign employees, most of whom are involved in joint venture production and technology. In 2007, Cummins sold over $1.7 billion in China, a 50% increase from 2006, accounting for 10% of the company's total global sales. As the top Chinese leader at Cummins, Wang Hongjie is confident in the company’s 25% annual growth target. He emphasized that China is currently Cummins’ fastest-growing region globally. “Last year’s actual growth far exceeded expectations, and this year’s growth is already close to 30%,” he said. Wang’s contributions extend beyond sales figures. His experience in entering Cummins China has become a standard training model for new senior managers. He helped the multinational company recognize early on the importance of China and the capabilities of local talent, which became a key driver for rapid development. During his initial interview, Cummins’ global leadership asked him what he was worried about. Wang replied confidently, “I don’t have any friends except English.” Before 1994, it was rare for foreign companies to hire local executives in senior roles. Cummins conducted a rigorous selection process with Wang. He was first interviewed by Cao Side, then Asia-Pacific Director, who now oversees global emerging markets. Within six months, four top executives from Cummins interviewed him before making the final decision. Despite his previous experience as General Manager of Inner Mongolia Northern Heavy Vehicle Co., Ltd., and his background in joint ventures and negotiations, Cummins insisted he first undergo training at their U.S. headquarters. He also needed to build personal relationships with the company’s top management. After one year in the U.S. and another at a factory in North Carolina—Cummins’ largest mid-engine plant at the time—he was promoted to a senior position in China. This model became the standard for recruiting senior Chinese executives. Wang Hongjie later managed a factory where he was tasked with increasing production from 32 to 35 units per hour to 42 in just six months. He achieved the goal in under three months. His success made him a model for future leaders. In terms of product development, Cummins has expanded its diesel and natural gas engine range from 1.4 liters to 91 liters, with power outputs from 31 to 3,500 horsepower. Customers can choose any model they need, regardless of location. Emission standards vary across regions, with the U.S. and Western Europe leading, followed by Japan, South Korea, Australia, and Singapore. China, Eastern Europe, and South America follow, but Cummins products are available in over 190 countries. Managing such a vast range of products requires a highly integrated supplier network. For example, the U.S. factory Wang once managed in 1995 produced four models, each with multiple variations. To handle this complexity, Cummins implemented computer networking across its supply chain. The company has also restructured its global production layout. The Columbus China Horsepower Plant focuses on Dodge Rams, while the North Macquarie Zhongmaili Factory serves non-road, marine, and agricultural sectors. Dongfeng Cummins is dedicated to trucks and domestic equipment. These changes have allowed Cummins to offer customers lower costs and higher quality. Wang Hongjie confirmed that some factories have been moved to low-cost countries. For instance, the joint venture with Beiqi Foton produces two new 2.8-liter and 3.8-liter light engines exclusively for the Chinese market. This decision was based on cost and compatibility, though recent RMB appreciation has added some pressure. Wang has always emphasized the importance of introducing advanced international technologies to China, localizing production, and establishing local R&D teams. This not only brings better environmental products to China but also helps export-oriented companies meet global standards. From his years of experience, he believes Cummins has a responsibility to help commercial vehicles, construction machinery, and shipbuilding industries align with global practices. Regarding exports, Wang noted that different market segments have varying percentages. In the passenger car industry, 40% of imported engines are used for export. Dongfeng Cummins has 8–10% of its products exported, including trucks, buses, and construction machinery. Construction machinery sees around 30% of imported engines used for export. Cummins operates over 5,000 service outlets and distributors worldwide, providing strong support to Chinese OEMs. Domestically, the company has 12 subsidiaries and manages over 300 distributors, mainly for imported models and high-technical products. They collaborate extensively with local OEMs like Dongfeng, Futian, Liugong, Xugong, and Sanyi, training dealers to repair Cummins engines. Some of these dealers have evolved into one-stop service providers. Dealer training follows strict guidelines, including testing, certification, and investment in tools and parts. This network ensures closer contact with end users and enhances customer satisfaction.

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