Global Foton, global Creation

ON February 18, Beijing Foton Daimler Automative was established as a result of nine years of hard work. Foton and Daimler have written the legend of an industrial alliance between giants, giving Foton strong wings to achieve its dream of “Global Foton, Global Creation.”

Alliance between Giants

The cooperation between the companies Foton and Daimler is an example of giants coming together to achieve new unprecidented goals. Foton, a Chinese company, is a global champion in commercial vehicles sales, and the American Daimler is a world-class commercial vehicle manufacturer. The joint venture in medium- and heavy-duty trucks between these two outstanding companies ben- efits from the strengths of both, laying a strong foundation for them to reach a broader market.

In the past, joint ventures in Chinas automobile industry have been based on the introduction of a mature foreign model, mostly featuring assembly plants producing for domestic demand. With the founding of Beijing Foton Daimler Automative, Foton and Daimler will set up joint ventures in Russia, South Asia, Central and South America, and other countries and regions. The operations center of global business cooperation will be located in Beijing, responsible for management, decision-making, research and development, production, supply chain management and marketing management, while offices in Russia and other places will serve as regional production and sales beachheads.

The future Auman vehicles that will be produced through the venture will be sold through Daimlers sales networks in overseas markets. Daimlers heavyduty truck engine can be installed in heavy-duty Auman trucks to improve their competitiveness in Chinese and emerging markets, combining the complementary expertise of the two parties and bringing them shared benefits.

Building a World-class Automotive Brand

Although the joint venture between Foton and Daimler can be called a milestone in the domestic sector of commercial vehicles, Foton has already gained successful experiences of joint ventures with world-class enterprises. Early in 2009, Foton cooperated with Cummins on a light-duty engine and successfully built a highend brand of light commercial vehicles. Through improvements in technology and management, Foton enhanced its global competitiveness in the field of light-duty commercial vehicles.

After several years of engaging in such cooperative deals, Foton has become adept at conducting joint ventures. Following its successful partnership with Cummins, Foton has shifted its sights to the broader international heavyduty truck market, intending to achieve greater growth and to continue being a model for business collaborations. The result of this is Beijing Foton Daimler Automotive.

As the worlds largest truck manufacturer, Daimler has the advantages of a high-end truck and engine production technology and a developed global marketing network, which attracted Foton, which yearns to enter the international medium- & heavy-duty truck market. What Foton brings to the deal is its leading position in China and the lower cost of production here. Both parties have fit together quickly and easily. Foton, with its world-class production and sales, is building a global brand and world-class auto company with a worldclass partner. As well as complementing each others strengths, in establishing a joint venture company Foton and Daimler can avoid trade barriers and obstacles, respond more swiftly in the international market and make a huge advance in globalization.

Reaching for the Globe from Beijing

Since its establishment in 1996, Foton has built a global network with its headquarters in Beijing, whole-vehicle and parts divisions in Beijing, Tianjin, Shandong, Hebei, Hunan, Hubei, Liaoning, Guangdong, and Xinjiang, and research and research & development centers in China, Japan, Germany, Taiwan and other countries and regions.

Foton is constantly expanding its territory. No matter how rapid the development is, however, its operation pattern remains keeping Beijing as the nerve center of global business managment, with operation centers set up in the worlds major industrialized countries. Foton and Daimlers joint venture company being located in the Chinese capital shows once again the status of Beijing as the strategic center of Foton. With the expansion of Foton Motors, its position of strategic center will become more prominent.

Last year Fotons domestic and overseas development reached new heights. At home, in April 2011, its utility vehicle production base in Miyun District, Beijing, went into operation with an investment of RMB 3.77 billion. In September, Fotons AUV Bus Division Guangdong Factory opened in conjunction with two new-energy automobile production bases in Beijing and Guangdong. Outside of China, Foton began its plant construction project in India, making Foton Chinas first commercial vehicle enterprise with a plant overseas.

The Indian factory is just the first step in Foton Motors global layout. Foton plans to build factories each with an annual output of 100,000 vehicles in Russia, Brazil, Mexico, Indonesia and several other key countries. It is expected that by 2015 Foton will finish the construction of five overseas factories, thus achieving global production and sales.

“5 +3 +1”: A Globalization strategy

In just over 10 years, Foton gradually achieved the leading position in light-, mediumand heavy-duty trucks, new energyand other areas of Chinas auto industry and ranked first in 2009 for global commercial vehicle sales. Now, entering a wider market and building a world-class vehicle brand has become a more important strategic objective for Foton.

In order to speed up the process of globalization, Foton will implement its “2020” Strategy based around the idea of “5+3+1,” in which “5”refers to constructing five overseas factories with an annual output of 100,000 vehicles each in Russia, India, Brazil, Mexico and Indonesia; “3” refers to cracking the worlds three major auto markets in the European Union, North America, and the Japan-South Korea region by constructing a series of key projects to optimize Fotons product mix and to develop high-end cars and engines,becoming the first Chinese car brand to enter developed countriesmarkets; and “1” refers to becoming the number one player in the Chinese car market, particularly in the commercial vehicle sector, as well as the leading domestic car brand.

“In the future, Foton will strive to become a truly world-class mainstream car brand through its strategic alliances with auto giants like Daimler and Cummins,” says Zhao Jingguang, spokesman of Foton. He holds high hopes for Foton Motors international strategy.