From a loss-maker to world's No. 1 heavy transmission maker

After several years of loss-making and brain-drain in the late 1990s, Shaanxi Fast Auto Drive Group Company (Fast for short) generated sales revenue of 1.2 billion yuan in 2003, about 2.5 billion yuan in 2005, and over 6 billion yuan in 2007 (US$1=6.99 yuan now). Fast has also explored the global market. Annually, it has multi-million-yuan OEM projects for the United States and Europe and exports more than 10,000 gearboxes to Eastern Europe. Fast has become the world’s largest manufacturer and supplier of heavy transmissions, holding more than 86% of the Chinese gearbox market for 8 ton-plus heavy trucks, 92% for 15ton-plus heavy trucks, and more than 50 carmakers have designated Fast’s gearboxes as their OE products for about 1,000 truck models.

Chairman and General Manager of Shaanxi Fast Auto Drive Group Company

Gasgoo.com: Can you say something about the R&D capability of Fast?

Li Dakai: I started as an auto-making technician and know much about China’s auto-making, so I pay much attention to the research and development (R&D) in my company. Fast’s current R&D spending is about 5% of the annual sales revenue but will increase much in the coming few years. From 2000 to 2005, we focused on the technical revamp and attained the world-best standards in production quality and craftsmanship. Since 2006, we have been following the path of independently innovation by boosting our R&D capability. As a milestone along this path, we are building a national-level R&D center – Shaanxi Fast Auto Drive Engineering Institute, which we plan to invest 600 million yuan in and complete in three years. Our company will undergo the multiple transitions “from technical reform to R&D, from manufacturing to sales & services, from the single conventional model to diverse modern products, from the local market to the global market." 
  
Gasgoo.com: What's your R&D focus in future?

Li Dakai: We will shift our R&D focus onto atomization, material and structural upgrades. Development of the Automated Mechanical Transmission (AMT) for heavy-duty commercial vehicles is one of our key priorities. Looking forward to the next five to ten years, heavy trucks will also be expected to offer comfort and labor-saving technologies. And I believe the AMT is a major effort to meet this demand. Also we will develop new processes and materials, such as alloy used in the car top aimed at reducing the vehicle weight. Advanced materials and technologies are needed to improve the vehicle quality in the designing period.

Gasgoo.com: As you know the rising prices of raw materials and a strong yuan pose heavy pressures on auto parts suppliers, how will you meet these challenges?

Li Dakai: I think we shall take a very positive view when facing these challenges. We will not take this opportunity to raise vehicle prices but will instead continue to pursue cost cuts strategy. Successful automakers, such as Toyota, are well-known for their price control methods. Under Toyota's ambitious Value Innovation (VI) plan, the automaker is expected to save at least $2.8 billion a year. Even Toyota is still making efforts to cut costs, why shouldn't we?

Gasgoo: Since cooperating with Eaton is good for Fast’s business expansion, why did you cancel the cooperation with American Eaton Company?

Li Dakai: We signed an agreement on technology transferring with Eaton in early 1985 and introduced advanced transmission technology. However, Eaton established its own local sub-branch to produce transmissions / gearboxes in 1997, which brought competition pressure to us. We have ever been seeking a joint venture with it but failed at last. At the beginning of 2004, Eaton changed its strategy and established Shaanxi Fast Gear Co., Ltd (SFGW) with Fast Auto Drive and Torch Spark Plug Co. Ltd. with a corresponding 55:23:22 share ratio. During three-year cooperation, Eaton only allowed us to produce one type product and forbade us to develop for ourselves, hoping we just produced auto parts. We learned from foreign company’s attitude that we couldn’t develop ourselves by only cooperating with foreign companies, who just intended to get rid of us as a rival. We can’t listen to them but should follow the call by our own country for independent innovation.

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