Background
Tan Xuguang was born in 1961, China.
旭光 谭
Tan Xuguang was born in 1961, China.
Tan received his primary and secondary education from 1968–77, the ten troubled years when China was convulsed with the Cultural Revolution.
In 1977, when his father was due for retirement, following the common practice at the time in China’s planned economy, Tan took his father’s place and started a career in the Weifang Diesel Engine Factory, the precursor of Weichai Power. From the age of 16, he worked as a member of the technical staff for ten years, moving on to take up managerial positions, including the deputy director of the factory’s foreign trade department, the general manager of Weichai Import & Export Co., assistant to the manager, and deputy manager of the factory. However in 1998, the factory ran into financial difficulties. It was unable to meet its payroll obligations for six months for its 13 600 employees, and had 300 million yuan of debts and a deficit of another 300 million yuan. These were the circumstances under which the 37-year-old Tan was appointed as plant manager.
With great effort, he managed to obtain a loan from the state bank and covered the payments to the employees. Shortly after, he restarted the production line and undertook a series of reforms, making the factory more market-oriented. By 2001, the factory finally erased its debts and began to make profits. In 2004, Weichai Power became the first Chinese diesel engine enterprise to be listed in Hong Kong and to achieve sales revenue of above 10 billion yuan. It was also the first domestic enterprise to develop and attain completely independent intellectual property rights for its Euro III high-power engine. More significantly, its sales volume for 10L engines exceeded 140 000 units, breaking the world record for single brand sales. In 2005, with RMB1 billion, Weichai Power acquired Torch Automobile Group, China’s largest gearbox producer, together with a vehicle factory. This was not only the largest cash-for-stock acquisition at the time, but also achieved integration between power train, auto parts, and commercial vehicles the three major elements of the heavy-duty truck value chain. By the end of 2007, Weichai Power had reached a revenue of more than 40 billion yuan through the sales of 300 000 engines, 500 000 gearboxes, and 60 000 heavy-duty trucks.
Tan attributes his success to continual innovation. First of all, Weichai Power became ever more market-oriented after various institutional innovations. Technological innovation is embodied in a progressive process from technology transfer and assimilation to the generation of indigenous technology and brands. By applying its power technology to heavy-duty vehicles, engineering machines, buses and in other fields, the group managed to duplicate its success in product innovation. More than 30 new products have been developed every year, accounting for over 43 percent of the company’s total industrial output value.
Meanwhile, the group launched service innovation through establishing a wide after-sales network consisting of over 2000 service stations in and outside China. In particular, the 16 offices and 20 service stations abroad ensured the company’s smooth expansion into global markets. What is more, Weichai Power has undergone a series of organizational innovations. A large engine manufacturer by nature, the group not only became a listed company through acquisition and capital operation, but also accomplished organic as well as external expansion through better management and resource integration.
Three decades have passed since his first day in Weichai Power and Tan is senior technician, foreign trader, executive and more. His next objective is to guide Weichai Power towards capital, brand, technology, and management globalization, and to achieve annual sales revenue of 50 billion yuan before 2010.