Cummins: Promoting Faster Business Development in China

In recent years, Cummins has made great progress in its business in China. The importance of business development in China is increasing in the eyes of the headquarters. As China's head of the Hua Jinsheng, the promotion of positions is naturally a matter of course. On April 7, 2005, according to Columbus, Indiana, USA, the company said that Cummins Inc. announced that it will promote Cummins East Asia business head Hua Jinsheng as the company’s global vice president.
Cummins’ business relationship with China began in 1975. Joseph Erwin Miller, the then chairman of Cummins, visited Beijing for the first time and became one of the first American entrepreneurs to seek commercial cooperation in China.

In 1979, China had just begun its opening to the outside world. The first Cummins China office was established in Beijing and was responsible for coordinating the production of heavy engine licenses for Cummins and CNHTC.

In 1981, Cummins began to license the production of engines in China. In 1995, Cummins' first Chinese joint venture engine factory was established. So far, Cummins has a total of 20 organizations in China, including six wholly-owned and joint ventures, and Cummins has entered the Chinese market. Eight of Cummins' fourteen engine series are locally produced in China.

In 2004, Cummins’ turnover in China was nearly US$1.1 billion, a strong increase from 2003, accounting for more than one-tenth of Cummins’ global business (Cummins’ 2004 total sales including joint ventures approached US$10 billion). Became the largest and most significant overseas market outside Cummins in the United States.

The great success of Cummins' business in China has become the unique highlight of the multinational engine company's dominance of the US Wall Street stock market.
The “Business Week” published on April 4, 2005, selected the “Top 50 US companies” based on the comprehensive performance of the S&P 500 stock index. Cummins scored A (optimum) in six of the eight business indicators. From 297 in 2003, the straight line jumped to 29th, which is one of the two largest companies in the list.

In its review, BusinessWeek highlighted the successful operation of Cummins Inc. in the Chinese market: “The driving force behind Cummins’ growth in 2004 was not only the North American truck market that ended the three-year recession cycle and began a full recovery, but also Cummins. The strength in the Chinese market is exemplified by the Dongfeng Cummins Engine Co., Ltd., a joint venture between Cummins and China Dongfeng Motor Corporation, whose turnover and profit in 2004 almost doubled.

The year 2005 marks the 30th anniversary of Cummins’ entry into the Chinese market. Since the Cummins China public image advertisement that began in April last year, the phrase “serving China for 30 years” has been prominently put together with the company logo, and has made people familiar with it. The slogan of "Thirty" shows that Cummins will continue to expand its business in China with greater confidence and strength.

Cummins’ new business objectives in China have been determined, that is, the turnover will reach 2 billion U.S. dollars by 2010. Dimm Solsol, chairman and chief executive officer of Cummins, who visited China recently, announced the company’s China strategy for the next five years: In the next one to one and a half year, total new investment will be 75 million U.S. dollars. Increased production capacity of Cummins China production base including Dongfeng Cummins, Wuxi Holset, Wuxi New Era and Shanghai Fleetguard, and increased turbocharger, filter and alternator components With regard to export intensity, the company will increase the construction of its distribution service system to further improve Cummins' after-sales service capabilities in the Chinese market. In terms of research and development, the engine R&D technology center cooperating with Dongfeng will soon start construction, and the first phase will mainly serve the Chinese market. The company began to integrate into Cummins' global R&D network and develop products for the international market. Cummins also plans to produce engine fuel systems in China. At the same time, Cummins will expand the scale of procurement of components in China.

In line with China’s staggering performance, senior leaders from all quarters, including CEO Dim Solso, have frequently visited China recently, and the Cummins Global Board of Directors was also held in China in October 2005. The Chinese region has been increasingly valued by the U.S. headquarters.

Mr. Hua Jinsheng, 45, joined Cummins Corporation (NYSE:CMI) in July 2003 and heads Cummins East Asia (China, Hong Kong, Taiwan, Macau and Mongolia).

Mr. Hua Jinsheng is currently based in Beijing and is responsible for the overall management of this fastest growing overseas market for Cummins in East Asia. Cummins is the largest foreign investor in the Chinese diesel engine industry. Its turnover in China exceeded one billion US dollars in 2004 and completed its established business goals one year ahead of schedule.

Hua Jinsheng attributed the success of Cummins in China to the following four points: First, we have good products; Second, we have good employees; Third, we have always adhered to our core values ​​in China; Whether it is compared with local competitors or with other multinational companies, Cummins has a long globalization time and has accumulated a lot of experience. Cummins has 80 years of history and operates in more than 100 countries around the world. For example, China's automobile exhaust emission standards are gradually changing from Euro II to Euro III. Cummins is currently the only multinational company that has its own diesel engine factory in China. Therefore, we can help China upgrade its Euro II engine to “Europe”. Third, while China’s domestic competitors did not previously have the Euro III engine, they lacked the experience of upgrading from “Euro 2” to “Euro 3”. In addition, more than 80 years of history have also allowed us to experience many different economic growth cycles. These experiences can help Cummins stand higher and can look at issues in a predictable manner, such as being proactive in terms of inventory and investment strategies.

Mr. Cao Side, Vice President of International Division of Cummins International and President of International Distribution Market, spoke highly of Hua Jinsheng's ability and contribution: “Mr. Hua brings a wealth of market and management experience to Cummins. He has many years of management practice in China. Cummins is particularly valuable. China is one of the most important overseas markets for Cummins. Under the leadership of Mr. Hua Jinsheng, Cummins has maintained a good momentum of development in this region."

In addition to his performance in company work, Mr. Hua Jinsheng actively participated in social activities. He is a co-founder and director of the China People's Foundation, a private, non-profit charitable organization. He is also chairman of the Beijing International Christian Association. Mr. Hua Jinsheng has served as vice chairman of the two Chinese American Chamber of Commerce and is currently a director of the American Chamber of Commerce in China. He also served as the chairman of the four-year foreign airline representative association in China from 1998 to 2002. Hua Jinsheng is a director of the Junior Achievement China and Beijing Capital Club.

On September 20th, Hua Jinsheng will go to Wuxi to participate in the Asia-Pacific President and Provincial and Mayor International Cooperation Summit to promote the better development of Cummins in China and the Asia-Pacific region.

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