Moderator (Yang Liang): Next, we’d like to invite Minister Zhang Chunlin from the FAW Group to join us.
Minister Zhang Chunlin, Director of Management at FAW Jiefang Automobile Co., Ltd.
Zhang Chunlin: I haven’t studied much about China III because my work doesn’t involve sales. As you all know, FAW Jiefang is primarily known for its trucks. The brand is mainly associated with medium and light trucks, while the Jiefang company focuses on heavy-duty trucks. Since commercial vehicles are not exactly FAW’s own products, I can only share my perspective from the Jiefang side during this discussion.
In relation to this topic, I would like to express some personal thoughts. First of all, I want to thank the conference organizers for providing such an opportunity. At this year’s Beijing Auto Show, I noticed a growing interest in commercial vehicles. My colleagues received several invitations to attend related meetings, including Xu Changming’s report. There are many reasons for this shift—this is a positive trend. In the past, people focused more on passenger cars, and even events were dominated by them. This shows that commercial vehicles have not been well promoted, and their visibility was limited. We need to work together to raise public awareness of commercial vehicles.
In the future, more attention should be given to the development of commercial vehicles and the promotion of related activities. FAW sees Jiefang as a symbol of progress. Looking back, in 1956, the Jiefang car marked the beginning of China’s automotive industry, supported by the Soviet Union. Interestingly, the car itself was originally from the United States. Today, we still see it at the Wanke Company in the U.S. This reminds us that the roots of China’s auto industry lie in commercial trucks.
Second, commercial vehicles make up a large portion of the transportation system. They are productive tools, not luxury or consumer goods. Their development will definitely open up new markets for foreign companies. In recent years, the commercial vehicle market has grown rapidly, so we must pay more attention to their impact on the national economy and their role in driving economic growth.
Third, commercial vehicles represent the most autonomous segment in China’s auto industry. In the upcoming Olympic torch relay, national pride is high. Everyone wants to be strong, and the strongest advantage lies in trucks. Therefore, we should leverage this strength. Foreign sedan manufacturers entered the Chinese market and took advantage of it, but when they first arrived, the truck sector had the best chance of survival. This has been proven true over time.
Today, we can see that many trucks are produced through foreign partnerships. Medium trucks dominate the market, while the Dongfeng brand is fully domestic. This industry has made great contributions to China’s auto sector. Many talented individuals have come from truck manufacturing, so I hope more attention is given to this area.
Fourth, commercial vehicles are now entering the international stage. Several features indicate this global shift. The current topic of National III standards is a signal of internationalization and reflects national policy direction. More performance is expected in the National III market. Although I don’t deal with sales directly, I believe implementing National III standards is beneficial for the entire industry.
During the early days of Jiefang, it was a medium truck, operating under a highly planned economy. The threshold was low, allowing access to various resources and assembly. However, today, core components are available in the market, leading to fierce competition. If a company lacks competitiveness, it may shift to the agricultural vehicle market. I believe the National III emission policy increases costs for companies, but it also helps filter out weaker players.
FAW now has its own National III engine, and it is also developing toward National IV standards. We are not afraid of challenges. Our quality, marketing model, and after-sales service are evolving. Previously, engines could be repaired anywhere, but now repairs require networked systems and data retrieval through telephone lines. This has improved after-sales service significantly.
China’s commercial vehicles are shifting from the domestic to the international stage. This is a big and significant topic. On one hand, the domestic market remains the mainstay, and policies like National III are no longer just about mixing products. Demand is high, and export volumes are increasing, especially to Russia. Last year, we held a large exhibition where Putin attended, but he seemed uneasy, as he felt overshadowed by FAW’s success. This reflects China’s growing strength and manufacturing capability.
In the past, the Chinese auto industry focused on scale, but now that’s no longer the issue. We must go through the internationalization process: 1) Develop mechanisms and financial capabilities, with listing being a key step. 2) Ensure products meet international standards, not just for the domestic market. 3) Improve manufacturing technology, which is still relatively backward. 4) Build a complete marketing and procurement network. 5) Internationalize management.
The Jiefang brand has gone through several historical phases. Younger generations may not be familiar with it, but it has a rich history. The factory was built in 1973, and during the 1950s, Mao Zedong negotiated with Stalin, resulting in key projects, including the automobile factory in the northeast. This was based on Soviet designs, and the legacy is still visible today.
Jiefang represents the development of the Soviet Union’s industrial model. China traditionally built factories quickly, and the Jiefang project was no exception. Over the years, FAW has evolved, and now it is focusing on international expansion. Commercial vehicles are still largely state-owned, but there are foreign managers involved. The core remains Chinese, and major independent truck manufacturers rely on traditional methods.
The Jiefang brand has undergone multiple transformations. From the Cultural Revolution to the establishment of the Second Automobile Works, the brand has continued to develop. In 1987, Zhao Ziyang led research on China’s auto industry, recognizing its importance as a pillar of the economy.
At the time, cars were essential for door-to-door delivery, as planes and ships couldn’t do the job. Light vehicles were seen as the future. In 2000, FAW’s commercial vehicles entered a marketization phase. Today, the commercial vehicle market is still in an early stage of marketization, with inconsistencies in standards and variety. This needs improvement.
Looking ahead, FAW must continue to go international. We’ve already upgraded our products and held events with media participation. In 2003, FAW celebrated its 50th anniversary and established a third base. Our manufacturing technology is world-class, and we’ve invested heavily in improvements.
Management must also become more internationalized. We are implementing GPS systems and following international quality standards like IATF 16949. Information systems are being integrated across the company, and while some departments are still in the implementation phase, this is a crucial step forward.
I hope everyone continues to support and pay attention to Jiefang. We welcome everyone to visit and see for themselves.
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