Binzhou Piston aims to be world No. 1 piston maker

Shanghai, May 9 (Gasgoo.com) Shandong Binzhou Bohai Piston Co., Ltd. (Binzhou Piston for short), China's leading piston supplier, aims to become the world leading piston maker. Reporters from Gasgoo.com introduced Binzhou Piston in detail yesterday after an interview with Lin Fenghua, general manager of Shandong Binzhou Bohai Piston Co., Ltd.

Established in 1950, Shandong Binzhou Bohai Piston Co., Ltd. started to produce piston and machinery products in 1963. The history can be divided into three stages from the late 1970s.

The first stage extended from the start of China's reform and opening-up in the late 1970s till the end of 1980s. During a transitional period from a planned economy to a market economy, Binzhou Piston introduced some technology from Japan, making greater strides than its domestic rivals. Binzhou Piston thus became the bellwether of China's piston industry in 1986.

The company welcomed its second stage which spanned the 1990s, a key decade in its history. Using a follow-up strategy, the company learned advanced foreign technology and management. Then Binzhou Piston began to construct its own R&D platform, establishing the provincial-level R&D center in 1995 and national-level R&D center in 1999. Binzhou Piston laid a good foundation for future development during this period. A good R&D team enabled Binzhou Piston to enter a transitional period 5 years earlier than companies of the industry. In the commercial vehicle piston market, Binzhou Piston has gained a market share of 60%-70%. And the technology and quality gaps between its products and those of foreign companies became smaller gradually.

The third stage ranges from 2000 to the present. These 8 years has witnessed rapid growth of Binzhou Piston，which has expanded from a small factory to a big industry park. In this period, Binzhou Piston has implemented its globalization strategy both in human resources and marketing. It established a new lab which has passed the certification of ISO/IEC 17025. New experts are invited from Germany and the U.K., and new talents from the U.S.A are on the way. The R&D capability has reached a new high, with its spending on R&D increasing to 6%-8% of revenue from just 4% in 1995 as the provincial- level R&D center was set up.

In recent years, Binzhou Piston has pursued a development strategy of "focusing business on car industry and set foot moderately in other industries as well." Due to the changing demands at home and abroad as well as its own development needs, Binzhou Piston started other businesses besides piston-making, such as wheel hub, cylinder liners, and aluminum products, which are also for the automotive industry. The company doesn't lack money after being listed. Advanced technology has also been introduced by cooperating with specialized companies, which enables Binzhou Piston to reduce the technological risk. The market risk is also overcome thanks to Binzhou Piston's own demands for these products. For example, Binzhou Piston first built an aluminum factory in order to save energy and then began to invest in industries related to piston manufacturing. A wheel hub factory was set up jointly with a German company --BBS Kraftfahrzeugtechnik AG, a famous wheel hub manufacturer. Later, because of BBS' bankruptcy, Binzhou Piston changed the partner to Qinhuangdao Daika Xinglong Hub Co., Ltd., the largest wheel hub producer in China now. The cylinder liners factory was a joint venture with Slinger Mfg. Co., Inc., which specializes in the production of cylinder liners.

Currently, Binzhou Piston ranks among the global top five makers of pistons for commercial cars. In contrast to piston business for commercial cars, the passenger car piston trade is still weak. About 30% of the products are supplied to the passenger vehicle market, but it only generates about 15% of the revenue. However, Binzhou Piston sees a great growth opportunity in this market, because the Chinese passenger vehicle market is the fastest growing market in the world. Binzhou Piston is confident about making its sales in the passenger vehicle market equal to that in the commercial vehicle market in the next five years.