The current economic slump has left no industry unspared. Compared with its foreign counterparts, Chinese automakers have been so far less severely impacted. Thanks to the government’s stimulus package and favorable policies, China’s auto industry registered a production and sales volume of 2.5676 million and 2.6788 million in the first quarter of 2009, up by 1.91% and 3.88% respectively. However, it is noteworthy that China’s commercial vehicle sector did not fare as well as the passenger car sector. The bus & coach industry, in particular, saw its sales volume down by over 35% in the first quarter of this year, which raises concerns about the further expansion of the fledging sector.

How have China’s bus & coach builders been doing to beat down the current economic turmoil? Recently our reporter paid a visit to Xiamen King Long United Automobile Co., Ltd. (Kinglong for short) to find what measures the giant in China’s bus & coach industry has taken to swim against the current economic trend.

Kinglong Exhibition Area at Beijing 2009 Bus & Truck Expo

In 2008, as the fastest growing enterprise in terms of bus & coach export, Kinglong realized a turnover of RMB 5.246 billion (USD 768.141 million) and an export value of RMB 1.4 billion (USD 204.988 million), up by 15.3% and 88% respectively.

Despite of the gloomy economic landscape in early 2009, Kinglong has so far made staggering achievements by securing an order of 406 buses from Senegal. Moreover, the company won the public bidding offered by Nanjing Public Transport. According to the deal, Kinglong will supply 390 units of buses to the city. Till now, statistics indicate that Kinglong has upped its bid winning rate by six point percentage, to 41.2%.

Kinglong XMQ6140P2

How did Kinglong manage to beat the current economic downturn? LIU Zhijun, Manager of Market Dept. of Kinglong points out, “in early 2009, Kinglong repositioned itself after a careful and prudent analysis of the economic trend in the near future. Great attention has been attached to the internal management since then. To lay a solid foundation for its sustainable development, Kinglong has been taking every possible measure to insure its profitability and the soundness of its cash flow.” To be specific, Kinglong regards cost management as a long-term project. In order to take a better control of its costs, it is far from enough to just cut its indirect expenses. Moreover, the company has been making consistent efforts to optimize its suppliers’ system and slash its purchasing costs.

YU Feng, Manager of Kinglong’s Purchasing Dept. reveals that guided by a principle of “Cooperation, Knowledge Sharing, Mutual Progress and Win-Win Results”, Kinglong has effectively cut down its purchasing costs while still continues to improve the quality of its supplies. Statistics show that the bus builder slashed its purchasing costs by RMB 110 million (about USD 16.11 million), accounting for 3.16% of its total independent purchasing value. In 2008, it saved costs by RMB 100 million (about USD 14.640 million), accounting for 2.5% of its total independent purchasing value. While its costs were down, the quality of the supply of its parts & accessories was still well maintained.

Kinglong XMQ6128Y

Apart from taking measures to cut costs from inside, Kinglong has become more careful and sensitive in market research and product planning. According to LIU Zhijun, the company will stay competitive as it continues to keep a vigilant eye on the ever-changing market trend and meet the needs of its customers.  

During the visit, our reporter notes that Kinglong XMQ6120C intercity coach, equipped with Euro V compliant engine, is the first of its kind in China and is targeted at the European market.

According to ZHOU Fangming, Manager of Kinglong’s Technological Dept., the bus builder will sure make some breakthroughs in the key technologies of hybrid bus & coach building and the optimization of bus & coach powertrain. 

Source : english.chinabuses.com

Editor : Mark

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