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25-01-2008 1.
A new direction
A winning collaboration with a leading European transportation
specialist has transformed the production capacity of the Chinese bus and coach
manufacturer Anhui Ankai Automobile Ltd. The result is a winning combination of
European technology and combining oriental charm. The
award-winning Anhui Ankai Automobile has become one of the leading bus and coach
producers in China over the last decade, with a formidable reputation for delivering
technologically advanced and luxurious vehicles. Its partnership with the German
company Setra Evobus has been a key driver in its success with Ankai's Setra range
of coaches, developed and manufactured with advanced technology garnered from
its successful relationship with the European transportation specialist. Anhui
Ankai Automobile, which is based in the city of Hefei in the Anhui province of
China, is a listed company that produces both large and medium size coach and
bus chassis, ranging from the standard offering and also serving the luxury end
of the market. It is largely considered to be the third biggest player in its
domestic transport market. Less
than three years ago this state-owned company merged with JAC group, which remains
Ankai's largest shareholder with 20 per cent of shares. Anhui Investment group
holding owns another 18 per cent of the group. The merger has given the company
renewed focus and determination to make the most of an expanding domestic market,
as well as realise significant export sales. 2.
Improved quality
With a new president and general manager in place, the company
hasn't reorganized, so much as redirected its focus towards improving quality
standards. It is also concentrating its efforts on the 'three forces': marketing,
branding and production. Ankai, famous for its high level of technological expertise
and its collaboration with its German partner, can now benefit from JAC group's
successful managerial approach. The company has also gone one step further in
reinforcing the idea of personal responsibility by introducing a performance related
salary scheme for staff. That's
not the end of the changes either: Ankai has incorporated with another Hefei-based
bus producer that was integrated into the JAC group some years ago. The idea behind
the merger was to reduce the number of competitors in the city. Now Ankai, which
is proud of the company's leading technology in China and its position producing
luxury coaches, works alongside its sister company, which is smaller and more
accustomed to producing the 10m bus. 3.
Shift in production
Historically, Ankai has produced both bus chassis and complete
coach systems, but in recent times it has focused on production of completed vehicles,
and is now producing less chassis, because nearly all bus manufacturers want to
produce bus chassis themselves and the volume and the profit margin is reducing.
In fact, last year, Ankai produced some 600 bus chassis compared to 2006, for
example, when 2000 bus chassis rolled off its production line. Today
Ankai is motivated towards expanding its product portfolio. Several years ago
it only produced luxury coaches and basic chassis, but the management team realized
it needed a larger portfolio of products to penetrate different segments of the
market. As such, the company increased its offering to include shorter and medium
sized coaches. In
fact, in 2007, Ankai has achieved a remarkable increase in the production volume
of its popular intercity buses. In 2004¨C6, its K40 and K47 long distance
models, derived from the original Setra bus, made the largest contribution to
turnover, but this year sales have dropped off and sales of the intercity range
have increased. The main reason for the decline in the 11m and 12m coaches is
competition. Originally, the long distance coach was the most profitable vehicle
but the competition on this market is fierce. Sales of the intercity bus are continuing
an upward trend. Last year, for instance, Ankai sold 1034 of its public transport
or intercity buses compared to 1294 long distance coaches. 4.
New styling
Ankai's strategic partnership with Setra Evobus, which began in
the early 1990s led to the company's president being hailed as 'the godfather
of the luxury coach in China'. The arrival of this leading European technology
was considered to be a pioneering move, and last year the company continued with
its innovative spirit by inviting a German designer to create a new coach with
a different profile to the rest of the Ankai fleet. The
company's collaboration with Setra Evobus has stood the test of time and led to
a number of successful new additions to the Chinese bus and coach industry, including
its most recent product: the 315 HD model launched in 2002. Ankai has established
a special sales team to focus on raising brand awareness and increasing the sales
figure beyond the 200 units it has sold to date. In comparison, its predecessor,
the 215 model is something of a success story; selling more than 1000 units. 5.
Key markets
Ankai manages branch offices in every province of China but it
has always made key sales in southern China, and the three most southerly provinces
provide its most important sales markets today. It believes the southern tip of
China, as well as the eastern provinces, hold great potential for the future. Last
year, Ankai looked outside of its domestic market for international sales, and
in doing so set up an international business affairs department manned by English-speaking
staff. It has paid off: Ankai has exported 11 coaches to Hungary and Romania,
2 CNG city buses to Peru, 300 buses to Saudi Arabia, and has already delivered
120 bus to a customer in Malaysia£¬more than 100 buses to United Arab
Emirates, and signed a contract with Iran ARG Diesel Co. for exporting 600 units
Ankai bus including 18m BRT (Bus Rapid Transit) and 12m city bus each for 300
units. The models are HFF6180G02D and HFF6122GZ. 6.
Specialist production
Production is split between two sites that manufacture
either complete buses and luxury models or public transport vehicles. It is currently
in the middle of an investment programme that began last year with a cash injection
of CNY 15 million in updating technology. It plans to invest another CNY 50 million
this year in order to establish a new centre for the production of axles. This
latest investment comes on the back of an increase in demand for the company's
axles beyond its own production needs. The company is also planning to make subsequent
investments in its on-site painting and finishing lines. Aside
from production, Ankai is also investing in researching the benefits of the Bus
Rapid Transit system, currently in operation in China and Brazil. In terms of
product development it has also launched a new 13.7 metre luxury coach last year
to meet demands for luxury on long journeys. This year has also seen the development
of Ankai¡¯s multipurpose bus, which is also in demand and can be used
on school runs, corporate transport or as an operations bus, for example. 7.
Fierce competition
One of the main challenges for Anhui Ankai Automobile is
the fierce level of competition in the Chinese market. All of its competitors
are following the same lines, and developing the same products for their own customers.
However, Ankai continues to strive for innovation for increase in 2008. The Chinese
coach and bus market has vastly developed over the last year, and Ankai believes
the onset of the 2008 Beijing Olympics, together with a number of significant
events in the Chinese calendar over the course of 2008, may help to drive sales
forward.
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