Brand strategy boosts growth for automobile giant

On September 11, the seventh batch of Chinese Top Brands was named by the General Administration of Quality Supervision, Inspection and Quarantine at the Great Hall of the People in Beijing. On the list were the Shaanqi brand heavy-duty truck and Hande brand vehicle axle, produced by the Xi'an-based Shaanxi Automobile Group Co Ltd.

"This makes Shaanxi Automobile Group the first truck and vehicle axle producer to win the Chinese top brand title, an evidence of the company's powerful technological strength and brilliant performance in the domestic market," said Zhang Yupu, chairman of the group.

According to Zhang, China's current heavy-duty truck producers include such enterprises as First Automotive Works, Dongfeng Automobile Corp, China Heavy-Duty Truck Group, Shaanxi Automobile Group and Beiqi Foton Motor Co Ltd. Among them, Shaanxi Automobile Group has demonstrated the fastest growth rate.

In 1999, Shaanxi Automobile Group sold only 2,000 units of heavy-duty trucks, but in 2006 the figure increased to 42,000 units. Its sales revenue also grew from 500 million yuan in 1999 to 8 billion yuan in 2006, marking the highest growth rate among China's heavy-duty truck producers.

Also in 2006, the group took up 13.39 percent of the domestic market share, with share in above-15-ton trucks reaching 34 percent.

In addition, the number of suppliers to Shaanxi Automobile Group reached 652, said Zhang. The group's expenditure on buying spare parts from these enterprises hit 6.47 billion yuan, making it a major contributor to local economic growth.

Brand strategy

"The honor (of Shaanxi Automobile Group winning the top brand title) can be attributed to the high quality of our products and service," Zhang noted.

Shaanxi Automobile Group's predecessor was the Shaanxi Automobile Plant, which used the brand name of Yan'an. In 1993, the group registered the Shaanqi brand.

Since 2001, the group has implemented the "double excellence" brand strategy, aiming to achieve healthy development by offering excellent products and excellent services to customers.

In 2006, the "double excellence" strategy became the guideline of the group's 11th Five-Year Plan (2006-10), and was implemented in the entire process of research and development (R&D), purchasing, manufacturing, sales and service.

To date, the group has won a series of quality certificates, including 3C - the nation's compulsory certification, GJB9001A-2001 - the military certification, ISO9001 - the quality certification, ISO14001 - the environmental certification, and the work safety certification GB/T28001. All these act as a sound guarantee of the group's product quality.

Competitive products

Under the "double excellence" strategy, Shaanxi Automobile Group has witnessed a steady increase in the competitiveness of its products.

At present, the Shaanqi brand includes four commercial vehicle sub-brands, namely Delong, Deyu, Shunchi and Aolong.

The Delong F2000, incorporating MANF2000 technology from its German partner MAN Corp, is the representative of China's third-generation heavy-duty trucks.

It was also China's first heavy-duty truck exported to the European market. It has won such national honors as being named the best commercial vehicle in terms of technological advancement, and best heavy-duty truck in terms of customer satisfaction in 2006.

Shaanxi Autombile Group is one of the pioneers in the production of China's military-purpose cross-country vehicles.

As early as 1974, Shaanxi Automobile Plant presented the Yan'an military-purpose offroad vehicle - the first artillery carrier in the country.

At present, the group's Shaanqi SX2150 and SX2190 heavy-duty offroad vehicles, used to carry heavy-duty weapons, occupy more than 95 percent of the domestic military market.

In addition to its strict quality management, a strong R&D force is another reason behind Shaanxi Automobile Group's success, Zhang pointed out.

The group has joined hands with four other large-sized local enterprises to establish an automobile engineering academy.

Covering a floor space of 7,000 sq m and featuring state-of-the-art research and testing facilities, this is a provincial-level enterprise R&D center. In addition, it boasts a strong team of more than 400 technical professionals, including returned overseas scholars and postgraduates with master's and PhD degrees.

Also, Shaanxi Automobile Group is planning to invest 400 million yuan in building a State-level technological development center.

Global expansion

Shaanxi Automobile Group is not resting content with the honors it has won in the domestic market, but is now implementing a globalization strategy to expand its overseas markets, said Zhang.

As one of the nation's leading exporters of heavy-duty trucks, the group has stepped up the construction of sales and service networks in the overseas markets.

It has recently built 14 representative offices in countries such as Angola, South Africa and Algeria, and two 4S stores in Kazakhstan and the United Arab Emirates.

In addition, it has cooperated with more than 100 dealers in dozens of countries and regions in Asia, Europe, the Americas, Africa and Oceania.

Last year, its export value reached $63.6 million. During the first half of this year, the group's export value amounted to $100.79 million, increasing 691.7 percent year-on-year and laying a solid foundation for the group to realize its annual target of $140 million.