CITIC Dicastal Co., Ltd.: Building a globally competitive industrial ecosystem by the joint operation of the Group

Company profile

CITIC DICASTAL CO., LTD (Hereinafter referred to as CITIC Dicastal) is the first aluminum manufacturer in China mainland which was invested by CITIC group in 1988. CITIC Dicastal is the largest supplier for aluminum wheel and chassis components in the world after 30 years of development. In 2017, CITIC Dicastal drove up total revenue to 26 billion yuan, a rise of 32% over last year. And Dicastal ranks 71 among world top 100 global OEM parts suppliers as its production and sales ranked first in the world for ten consecutive years.
 
Challenges
 
Since 2002, China's automotive industry has experienced explosive growth, bringing unprecedented opportunities and challenges to the domestic auto parts industry. On the one hand, market demand has increased dramatically, and aluminum wheels are in short supply. On the other hand, due to factors such as technology, capital, and production cycle, the aluminum wheel production capacity gap is large, and it is difficult to break through the production bottleneck in time. How to integrate decentralized industry resources and meet market demands through high standards and efficient cooperation has become a common challenge facing the industry.
 
Solutions
 
Based on customer needs, CITIC Dicastal creates the joint operation of the Group, to integrate industry resources with light assets, and build mutual trust and win-win relationships with partners to achieve common growth of the company and its partners.
 
Establishing core competitive advantage to lay a technological foundation for the joint operation of the Group
 
CITIC Dicastal strives to establish its core competitiveness based on the market, technology and brand, and it has built a complete lightweight technology system to constantly improve its techniques so as to ensure that the company can obtain abundant market orders and that its operation mode can work smoothly. CITIC Dicastal has 1,367 professional technicians and over 400 research and development personnel. In the past three years, the annual growth rate of research and development expenditure was 24% in average, and the input on research and development reached over 3% of the sales revenue. The company has presided over and participated in the formulation of over 30 standards and owned 4,500 patents. The number of patents that it holds is twice of that of the other domestic competitors combined. CITIC Dicastal has established 6 product research and development centers in places like China and America. It aims to enhance its active product development capability to lead the customers’ demands, to realize the seamless conversion from modelling concept to product and to form a competitive technological advantage.
 
Enhancing ecosphere management to provide organizational guarantee for the joint operation of the Group
 
CITIC Dicastal is advantageous in market, research and development and brand. It has established some joint venture enterprises with its peer companies mainly by using its technology and brand as investment for shares. These joint venture enterprises have capacity advantage and geographical advantage. The two parties can make their respective advantages complementary to each other to seek common development. In the mode of joint operation, CITIC Dicastal takes technology and management as core and focuses on “four bases and two centers”, namely new product research and development base, new technology and new equipment research and experiment base, talent cultivation base, high-end and core product manufacturing base, global marketing network center and finance control center. CITIC Dicastal has built a global benchmarking plant for the aluminum wheel industry, established the Institute of Engineering Technology, implemented global strategic marketing, built a global capital pool and invested in building a world-class testing center for spare parts and a talent training center.
 
CITIC D Dicastal has established a well-organized management institution with a clear division of labor and is equipped with adequate management and technological teams to carry out the daily management work involved in the joint operation. The joint operation mode facilitates the improvement of operation and enhances peer communication through benchmarking management. The operation management department of CITIC Dicastal collects and analyzes the cost, quality and other core indicators of each enterprise every month. Through benchmarking management, each enterprise can learn from each other to make up for their own shortages and it ensures the continuous progress of the whole joint operation platform.
 
Implementing five unified management to establish a management method suitable for the joint operation of the Group
 
In the management practice of joint operation, CITIC Dicastal has explored and summarized a set of effective management methods – “five unified management”, namely unified product development, unified brand, unified technical quality, unified market sales and unified production plan. The headquarters of the company is responsible for product development, and each joint venture enterprise produces products according to the company’s technology standards and accomplishes the production plan on time. All products shall use the trademark of “DICASTAL”. Unified sales and after-sales services by CITIC Dicastal is implemented. Each joint venture enterprise shall establish unified technical quality standards and fully accept the technical quality management of CITIC Dicastal.
 
Achievements
 
CITIC Dicastal and its partners co-exist with each other and seek win-win cooperation and common development, thus having formed a dynamic enterprise ecosystem together.
 
Social benefit
 
After more than 10 years of development and improvement, the joint operation Group has become an efficient and coordinated organic whole with their respective advantages and clear division of labor, continuously releasing strong development vitality. CITIC Dicastal provides technical guidance and management support to all enterprises of the joint operation platform. The profitability of each joint venture has been improved year by year and their level of production and automation has been steadily improved. They have gradually grown into a core force in the industry.
 
Through industrial integration, CITIC Dicastal utilizes its idle capacity resources effectively, optimizes market competition pattern, and drives the overall improvement of the competitiveness of the domestic aluminum wheel industry. The company grasps the core technology of aluminum wheel industry, and constantly cultivates the development ability synchronous with the main engine factory. It also sets up factories in overseas regions like the United States and develops the national industry to contribute the CITIC Dicastal strength to build China into a manufacturing power.
 
Environment benefit
 
Lightweight is conducive to reduce fuel consumption of cars. Experiments show that if the weight of a car is reduced by 10%, the fuel efficiency can be improved by 6% to 8%. For each 100kg reduction in vehicle quality, the fuel consumption per 100 km can be reduced by 0.3 to 0.6 liter. Replacing traditional steel wheel with aluminum alloy wheel can reduce the weight of the car by at least 30%. At the same time, aluminum can be recycled for many times without affecting its quality, and the energy consumption of aluminum recycling is only 5% of that of the production of original aluminum.
 
The type of lightweight auto parts produced by CITIC Dicastal accounts for 30% of the aluminum used in each automobile. The green lightweight auto part can reduce carbon emission by 200,000 tons every year.
 
Economic benefit
 
Through the joint operation mode, CITIC Dicastal has expanded its capacity within a short time and achieved a leapfrog development. In 2003, when aluminum wheel capacity was insufficient, the company tried to innovate its operation mode and integrated industrial resources to deal with the market pressure. In 2008, under the hard hit of financial crisis, CITIC Dicastal invested in over 10 aluminum wheel enterprises and established the joint operation Group with CITIC Dicastal as the core and the joint venture enterprises as production bases, becoming the world’s largest aluminum wheel supplier.
 
By virtue of its strong technological strength and brand advantage, CITIC Dicastal has taken the lead in passing the appraisal and certification of leading global automobile manufacturers such as Benz and Audi, and its brand has been highly recognized. As the first aluminum wheel enterprise in mainland China, the company’s business capacity has reached 60 million, providing supporting products for more than 10 million vehicles in the globe every year.
 
Prospect
 
In the future, CITIC Dicastal will continue to enhance the competitiveness of the industrial ecosystem, deepen the joint venture model, promote intelligent manufacturing of automation, information and standardization, and coordinate with each other to promote efficient collaboration, mutual promotion, and win-win cooperation, which will facilitate the company to be “the world’s leading lightweight, modular, and innovative integrated parts enterprise group with core technologies, and being a national brand.