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

Time and number coincidences often spark interesting reflections. In 1986, Cummins’ global sales reached $2.3 billion. Remarkably, this figure was the target Cummins China aimed to achieve in 2008. On July 18, 2008, Wang Hongjie, Vice Chairman of Cummins (China) Investment Co., Ltd., stated in an exclusive interview, “Including its joint ventures in China, Cummins' sales in the Chinese market are expected to exceed $3 billion by 2010.” When Wang first joined Cummins, that number had grown 30 times. Now 62 years old, Wang Hongjie joined Cummins in 1994. At that time, the company had no joint venture in China. Its business was divided into three main areas: mining vehicles, technology transfer and licensing to Dongfeng and Chongqing, and the production and sale of certain spare parts and generator sets. “At that time, annual sales were over $100 million, and the Beijing office only had six employees,” he recalled. Today, with joint ventures, Cummins employs over 6,000 people in China, and its Beijing headquarters has 750 staff. Cummins in China is largely a local team, with about 40 foreign employees, mostly focused on 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 noted that actual growth last year far exceeded expectations, with a 30% increase this year. Wang Hongjie’s impact goes beyond numbers. His journey into Cummins China has become a model for training new senior managers. He helped the company recognize early on the importance of China and the capabilities of local talent, which became a key driver for rapid growth. During his initial interview, a global executive asked him what he was worried about. Wang replied, “I have no friends except English.” Before joining Cummins in 1994, it was rare for foreign companies to appoint local executives to senior roles. Cummins conducted a rigorous process, interviewing Wang four times within six months before making a decision. Prior to that, he had experience as general manager of Inner Mongolia Northern Heavy Vehicle Co. and had worked on joint ventures and negotiations. However, Cummins still required him to undergo training at the U.S. headquarters before taking on a senior role in China. He spent one year in the U.S. and another at a factory in North Carolina, which was then the largest mid-engine plant for Cummins. This model proved effective, and later, the company adopted it for recruiting senior Chinese executives. Wang managed the factory with clear goals, such as increasing production from 32 to 42 units per hour in half a year—something he achieved in less than three months. How does Cummins respond to the global market? Wang Hongjie has expanded their diesel and natural gas engine product range from 1.4 to 91 liters, covering power outputs from 31 to 3,500 horsepower. Customers can choose any model based on their needs. Different markets have varying stages of development, influenced by local emission regulations. The U.S. and Western Europe lead in emissions standards, followed by Japan, South Korea, Australia, and Singapore. China, Eastern Europe, and South America are catching up. Cummins now sells products in over 190 countries. Managing such a diverse product line requires a highly integrated supplier network. For example, the U.S. factory Wang managed in 1995 produced four models across multiple applications, totaling 3,200 different specifications. To handle this complexity, the entire supply chain is computer-networked. Cummins has also optimized its global production layout. For instance, the Columbus China Horsepower Plant focuses on Dodge Rams, while the North Macquarie Zhongmaili Factory targets non-road, shipbuilding, and agricultural sectors. Dongfeng Cummins specializes in trucks and domestic equipment. These changes, implemented over the past two to three years, allow Cummins to offer better quality and lower-cost products globally. Wang Hongjie confirms that some factories have been moved to low-cost regions. For example, the joint venture with Beiqi Foton produces unique 2.8-liter and 3.8-liter light engines, not found elsewhere. This decision was based on cost and compatibility, though the rising value of the yuan has added pressure. Wang emphasizes the importance of bringing advanced international technologies to China, localizing production, and establishing local R&D teams. This not only benefits the environment but also helps export companies meet international standards. Based on his long-term experience, he believes Cummins plays a crucial role in advancing the engine industry and helping commercial vehicles, construction machinery, and shipbuilding companies align with global trends. How much of Cummins’ domestic production is used for exports? Wang said it varies by segment. In the passenger car industry, 40% of imported engines are used in exported vehicles. Dongfeng Cummins sees 8–10% of its output used for exports, including trucks, buses, and construction equipment. In construction machinery, around 30% of imported engines go to exports. With over 5,000 service outlets worldwide, Cummins supports many OEMs in China. Domestically, it has 12 subsidiaries and more than 300 distributors, mainly handling imported models and high-technical products. The company collaborates extensively with domestic OEMs like Dongfeng, Futian, Liugong, Xugong, and Sanyi. It trains dealers to repair Cummins engines, many of whom have evolved into full-service providers. Dealer training follows strict guidelines, including testing, certification, and investment in tools and inventory. This network ensures closer proximity to end users and better support for customers.

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