XCMG: Globalizing China’s Manufacturing Industry

Furthermore, XCMG invests five percent of its annual sales revenues in research and development, and has set up an academic research station, a post-doctoral research station, as well as an advanced technology development institute composed of experts under the Chinese government’s “Recruitment Program of Global Experts.” Meanwhile, the company established a national level lab and a comprehensive construction machinery experimental center at the XCMG Research Institute. The company’s R&D department focuses on basic research and practical application research, as well as research on energy conservation and emissions reduction for sustainable development. XCMG has recruited and nurtured more than 6,000 talents and over 100 top-notch experts in the construction machinery sector. The company also provides free housing for senior professionals to enable them to settle in Xuzhou with their families. Today, XCMG has 200-odd core technologies and 2,000-odd patents in the high-end equipment manufacturing sector in terms of intellectualization, lightweight design and energy conservation, and environmental protection. Also XCMG is developing over 100 patented items of equipment that are of great significance to national economic and social development, and meet certain standards set by the Chinese government.

In October 2013, XCMG launched Europe Co., Ltd., a Europe R&D Center and a Europe Procurement Center. According to Wang Yansong, vice president of XCMG, the R&D center employs top-notch construction machinery talents who work with a prospective and pragmatic view to producing better products. Its research results are very helpful to guiding the establishment of R&D centers in developing countries, including China. Through its fusion with Europe, XCMG has greatly improved its manufacturing technology and capacity for making key components, upgrading itself to a transnational supplier of construction machinery products, boosting its exports of key components, and improving the functions of its complete machines. Its 22 representative products, such as truck-mounted cranes, loaders and excavators, have been granted the EU’s CE mark, and meet U.S. SAE standards, so building its image of reliable and durable products with optimum price performance in the international market. XCMG construction machinery products have been widely utilized in various big projects around the world, chosen for their outstanding performance.

International clients continue to place orders with XCMG, citing 100 percent satisfaction with the high quality and advanced functions of XCMG products. An Indonesian client recently sent a purchase order for a 1,250-ton crawler crane from XCMG, the heaviest-duty machine of this kind that China has ever exported. The client paid 95 percent of the crane’s transport costs to the Port of Shanghai and the remaining five percent after its assembly in Indonesia. Before closing the deal with XCMG, the Indonesian company had been in negotiations with another Chinese supplier for four months. The supplier agreed to let the buyer pay the purchase price over a three-year period. However, the client eventually chose XCMG.

Chairman Wang Min said, “This year XCMG is mainly relying on building its brand, service and technology to expand its exports to developed countries. Our service refers to a systematic solution plan to help our clients achieve success. In other words, our clients’ success is our success.”

Recently, a large U.S. rental company told Wang, “The excavators produced by XCMG are comparable to those produced by the Japanese company, Komatsu Ltd. But XCMG provides better customer service compared to other enterprises.” That rental company initially bought 100 excavators from XCMG, but bought another 100 soon after its first order. Its former supplier, a famous U.S. construction machinery company, was surprised at the news.

XCMG merged with three European enterprises, including the German manufacturer Schwing Stetter.

Breaking the European Market

XCMG Europe R&D Center, which was established with an investment of €36 million, is an enterprise featuring state-of-the-art technology. It takes advantage of the R&D resources in Europe through cooperation with well-known universities and recruitment of senior engineers. According to Wang, XCMG Europe Co., Ltd. aims to realize complete integration of technology, products and talents between China and Germany and to make breakthroughs in key technology development and the supply of key components. The XCMG Europe branch is expected to boost local economic development and social harmony in Europe and become a responsible enterprise.