"To make the quality on the ceiling and to make the cost on the floor." The slogan posted on the Dongfeng Nissan Technology Center is impressive. How to do this is precisely what Xu Jianming, deputy director of the Technology Center believes, is the biggest challenge facing Qichen, a joint venture brand.
By controlling the procurement system of parts and components, the joint venture company's extension to the upstream of the industrial chain and the gradual mastery of the entire industry chain are considered to be the main requirements of the joint venture that are currently popular.
Similarly, Dongfeng Nissan's Qichen brand is not only targeted at the integration of the industry's full value chain, and it is intended to realize the strategic transformation of the entire company. The key point for the integration of the entire value chain is the integration of parts suppliers. Dongfeng Nissan is breaking this slog by setting up a “Quality Alliance†in an open supplier system, breaking through the closed supplier system of Japanese automakers.
Change from openness to strategy
"We have come in contact with all of our joint ventures. Dongfeng Nissan is almost the most open." A supplier told the "First Financial Daily" that as long as the product meets the quality requirements of Dongfeng Nissan, it will enter its supply. Business system possibilities.
Because of the foreign import characteristics of the joint venture products, these products, which are often part of the global platform, have limited parts and components at the beginning of design due to cost considerations. The localization of joint ventures in China does not bring localized cost advantages.
At the same time, due to the potential huge profits of the component parts system, almost every joint venture company has its own relatively closed parts system, and this supporting system is often controlled by the foreign party. This situation is even more pronounced in Japanese and Korean car companies.
Take automobile production as the most basic raw material for automotive steel, 50% of domestic automobile steel is supplied by Baosteel. However, Beijing Hyundai, a Korean car company, must be purchased by Haisk from an overseas supplier and resold to Beijing Hyundai. This is a typical closed supplier system.
However, since the establishment of the Nissan Renault Alliance, Nissan’s CEO Carlos Ghosn has broken the Nissan’s Japanese parts system. After the establishment of Dongfeng Nissan, it also got rid of this shackle.
In the current situation of foreign product introduction, because the joint venture company does not involve the research and development of the product, even if Dongfeng Nissan has opened this component system, it will only satisfy the demand-based system. Dongfeng Nissan still cannot control more resources.
Xu Jianming told reporters that we were ready to make a transition two years ago. The emergence of Kai Chen accelerated the transformation. He said that in the past, he only paid attention to the single model imported by Nissan, and he had no chance to intervene from the beginning of R&D. Now, Dongfeng Nissan’s technology center fully assumes the development and research of Kai Chen.
In this way, from the very beginning of R&D, Dongfeng Nissan could deeply integrate parts suppliers, and thus cut into the top of the industrial chain and move from a simple manufacturing base to a truly true company.
Solve the conflict between quality and cost
In a general sense, quality and cost are contradictory, high quality necessarily corresponds to high costs, and low cost corresponds to low quality. And since the joint venture wants to be successful, it must break this contradiction. After the Dongfeng Nissan component supply system changes, it is possible to resolve this contradiction.
Dongfeng Nissan Purchasing Director Qin Hua told reporters that most of Qichen’s suppliers are also suppliers of Japanese product brands. While integrating existing resources, it will also cultivate local suppliers.
Xu Jianming said that the key to high quality and low cost lies in the core technology. He admitted that the core technology is gradually accumulating. "We have done related work on the Nissan model for eight years, such as the technical center's experimental capabilities, etc. These are not based on the standards for the localization of parts and components, but are based on vehicle development. Capacity planning."
Bao Ping, director of automotive board technical services of Baosteel’s product development department, believes that controlling costs first requires intervention in early-stage R&D. This is particularly important in domestic joint ventures because joint ventures are often foreign R&D personnel who undertake research and development work. They are not aware of Baosteel. And what parts and components are cheaper for domestic suppliers?
At present, there are more than 80 parts and components suppliers in Qichen, and all have R&D centers. Xu Jianming stated that there is no certainty in the selection of spare parts suppliers that no intellectual property rights are available; only an R&D center may not be able to do so. It must have positive research and development capabilities, otherwise there will be no core technology.
By controlling the procurement system of parts and components, the joint venture company's extension to the upstream of the industrial chain and the gradual mastery of the entire industry chain are considered to be the main requirements of the joint venture that are currently popular.
Similarly, Dongfeng Nissan's Qichen brand is not only targeted at the integration of the industry's full value chain, and it is intended to realize the strategic transformation of the entire company. The key point for the integration of the entire value chain is the integration of parts suppliers. Dongfeng Nissan is breaking this slog by setting up a “Quality Alliance†in an open supplier system, breaking through the closed supplier system of Japanese automakers.
Change from openness to strategy
"We have come in contact with all of our joint ventures. Dongfeng Nissan is almost the most open." A supplier told the "First Financial Daily" that as long as the product meets the quality requirements of Dongfeng Nissan, it will enter its supply. Business system possibilities.
Because of the foreign import characteristics of the joint venture products, these products, which are often part of the global platform, have limited parts and components at the beginning of design due to cost considerations. The localization of joint ventures in China does not bring localized cost advantages.
At the same time, due to the potential huge profits of the component parts system, almost every joint venture company has its own relatively closed parts system, and this supporting system is often controlled by the foreign party. This situation is even more pronounced in Japanese and Korean car companies.
Take automobile production as the most basic raw material for automotive steel, 50% of domestic automobile steel is supplied by Baosteel. However, Beijing Hyundai, a Korean car company, must be purchased by Haisk from an overseas supplier and resold to Beijing Hyundai. This is a typical closed supplier system.
However, since the establishment of the Nissan Renault Alliance, Nissan’s CEO Carlos Ghosn has broken the Nissan’s Japanese parts system. After the establishment of Dongfeng Nissan, it also got rid of this shackle.
In the current situation of foreign product introduction, because the joint venture company does not involve the research and development of the product, even if Dongfeng Nissan has opened this component system, it will only satisfy the demand-based system. Dongfeng Nissan still cannot control more resources.
Xu Jianming told reporters that we were ready to make a transition two years ago. The emergence of Kai Chen accelerated the transformation. He said that in the past, he only paid attention to the single model imported by Nissan, and he had no chance to intervene from the beginning of R&D. Now, Dongfeng Nissan’s technology center fully assumes the development and research of Kai Chen.
In this way, from the very beginning of R&D, Dongfeng Nissan could deeply integrate parts suppliers, and thus cut into the top of the industrial chain and move from a simple manufacturing base to a truly true company.
Solve the conflict between quality and cost
In a general sense, quality and cost are contradictory, high quality necessarily corresponds to high costs, and low cost corresponds to low quality. And since the joint venture wants to be successful, it must break this contradiction. After the Dongfeng Nissan component supply system changes, it is possible to resolve this contradiction.
Dongfeng Nissan Purchasing Director Qin Hua told reporters that most of Qichen’s suppliers are also suppliers of Japanese product brands. While integrating existing resources, it will also cultivate local suppliers.
Xu Jianming said that the key to high quality and low cost lies in the core technology. He admitted that the core technology is gradually accumulating. "We have done related work on the Nissan model for eight years, such as the technical center's experimental capabilities, etc. These are not based on the standards for the localization of parts and components, but are based on vehicle development. Capacity planning."
Bao Ping, director of automotive board technical services of Baosteel’s product development department, believes that controlling costs first requires intervention in early-stage R&D. This is particularly important in domestic joint ventures because joint ventures are often foreign R&D personnel who undertake research and development work. They are not aware of Baosteel. And what parts and components are cheaper for domestic suppliers?
At present, there are more than 80 parts and components suppliers in Qichen, and all have R&D centers. Xu Jianming stated that there is no certainty in the selection of spare parts suppliers that no intellectual property rights are available; only an R&D center may not be able to do so. It must have positive research and development capabilities, otherwise there will be no core technology.
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