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Opportunities in Latin Americas —— Interview with Steven Zhang

2014-10-20 -

☺ Yutong has grown into the world's bus manufacturer. Do you think what Yutong’s core competitiveness in the Latin American market is and what measures Yutong will take to further enhance its competitiveness?

After ten years of efforts in the Latin American market, Yutong has achieved a sales volume of over 10,000 units, ranked first in China’s bus industry. Its core competitiveness has been formed and will be further enhanced. Our core competitiveness is mainly the cost-effective bus products based on customers’ requirements, competitive lead time, comparatively well-established and trusted service network as well as spare parts guarantee system.

In the coming years, Yutong will improve depth and fineness of its market management through adhering to the “Customer-orientation” philosophy in a bid to enhance its brand influence and further boost its competitiveness in the Latin American market. Yutong sales people will work with the partners to deeply analyze the market and customers’ needs so as to develop products suitable to the local market; improve the ability, quality and efficiency of responding the customers based on “iron triangle” and “one-stop” mechanism; enhance the service network coverage and service quality through the LCC management, thus ensuring the good operating of the sold vehicles and supporting the fulfillment of the investment target.

☺Would you please make a brief introduction of Yutong’s market performance in the Latin American market? What kind of main or new products will be launched in 2014 and which activities will you carry out in the market?

Through years of efforts in the overseas market, the exported volume of Yutong buses in this area firmly ranked first in China’s bus industry and the gap with the competitors is widening. Yutong has become one of the major bus product and service providers in the Latin American market. In some key markets, Yutong has become the synonym of the local bus products and covered various market segments. The products and services are recognized and praised by the users, realizing the transformation from “made in China” to “created in China”. In 2014, Yutong will launch two new products, ZK6122H and ZK6838H, to the market, which can better fulfill the requirements of loading capacity, fuel consumption and comfort raised by the customers and bring optimal operating experience and income to the customers in the area.

☺Generally speaking, Chinese bus products are inferior to the foreign counterparts in terms of the brand strength and product level. Can we say that the competitiveness of Yutong buses or Chinese buses is still the price?

Of course, the price plays an important role in purchasing bus products, but it is not the only factor, since what the customers need is the comprehensive performance-to-price ratio and return on investment. In addition to the price advantage, Yutong’s fast delivery capability of large quantity can not be ignored. Compared with bus builders in Europe and Latin America, Yutong’s large-scale production ensures the fast delivery capability and is worthy of the trust of customers. Meanwhile, Yutong always concerns about how to help customers save the costs of repair and maintenance, reduce the operating losses and cut the fuel consumption. Since taking the whole life cycle costs (LCC) into account, the procurement costs only takes up about 30 percent, and the other costs like fuel consumption, repair and maintenance costs accounts for about 70 percent. Therefore, the price advantage at the procurement phase is far from enough, that is why Yutong always advocates the LCC concept.

☺Many well-known multinational companies are trying to carry out the “global operations, local management” mode. How do you think of this trend? Could you please introduce the development situation of Yutong’s sales network in Latin America and the localization status?

Although Yutong is a China-based bus brand, it is committed to the global production and market management. In our view, the “global operations, local management” means making use of the global layout and optimized production and sales mechanism to manufacture products in comply with the requirements of local customers and conduct localized services. At present, Yutong has comparatively mature sales and service networks in the key markets of Latin America. Through setting up branches or offices in key markets and sending staff to settle in the local area, as well as cooperating with partners, Yutong has effectively covered the market with its sales and service networks and can provide an easy access for operators to purchase our products and get effective service support.

In respect of the localized cooperation, Yutong supports the local partners through cooperatively setting up factories in the key markets or via technical input. Through conducting cooperative production with the local enterprises from 2005 via technical support and transfer, Yutong supported the production of local enterprise and assembled three Yutong bus models in the local areas.the joint venture has been approved by the governments of both sides and the construction of the plant is about to begin. In Mexico, we have set up the relationship with the local partner and the localized assembling will kick off soon. For the regional market management, Yutong strengthened its cooperation with the local partners via the product technology, service support and financing to achieve the global operation and local management.

☺Yutong always advocates the “Customer-orientation” philosophy. How do you understand this philosophy while serving the Latin American market and are there some feelings or stories which impressed you most during the process?

Yutong adheres to the “Customer-orientation” and “Create more value for customers” philosophy all the time in the Latin American market. My understanding of it is the sales people should correctly figure out the common needs of customers, requirements on vehicles and expectations for service through in-depth research of the market and solve the problems in professional, rapid and effective way. The philosophy requires us to stand in the customers’ shoes and accurately understand the customers’ needs. Providing customers with products and services in comply with their operating expectations and adding value for customers are the existence value of Yutong and the internationalization responsibility Yutong should assume.

During the process of exploring the n market, Yutong provided the Long-distance Transportation Company with Yutong sophisticated and reliable 12-meter buses in accordance with their requirements on reliability, fuel efficiency and high operating intensity through in-depth and comprehensive research. Compared with their old bus products, the advantages of Yutong buses on fuel efficiency, reliability and durability are spoken highly by the Long-distance Transportation Company and state leaders. Fidel Castro, president of , has repeatedly praised that Yutong buses are the best bus products he has ever seen. It also tells us we can only be recognized by the customers and have a long-term cooperation with them when we stand in the customers’ shoes, research and fulfill their requirements and provide them with products and services in comply with their expectations.

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