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Cummins has moved to a bigger distribution center in Shanghai to enhance the US diesel engine giant's local supply chain capabilities and promote the global expansion of China's auto supply chain.
The new distribution center is located in Pudong New Area and covers an area of 30,000 square meters, while the old one covered 12,000 sqm, Indiana-based Cummins announced on Sept. 8. It also includes a new parts support center aimed at helping Chinese automakers go global and a supply chain solutions design center, it added.
The three new centers will be operated by Cummins' supply chain unit CCSC Technologies, said Chen Hua, chairman of the Shanghai-based subsidiary. Over the past decade, the unit's sales have surged to CNY4.6 billion from CNY1 billion (USD646 million from USD140.4 million), so the operational capacity of the old distribution center had to be doubled in response to market demand, Chen pointed out.
Cummins set up its distribution center in China in 1999, focusing on allocating imported parts in the domestic market, said Zhan Li, general manager of Cummins East Asia Distribution Division. However, its focus shifted to servicing the demand of Chinese supply chains expanding overseas with the rise of local manufacturing, Zhan added.
Cummins has over 500 distribution facilities and 5,200 dealers across 190 countries and regions worldwide, boasting extensive operational experience, Zhan noted, adding that this enables the company to provide strong after-sales service and parts supply support for Chinese carmakers venturing into international markets.
In addition to supporting vehicle manufacturers going global, the new center will continue assisting Chinese parts makers in their transformation, upgrading, and expansion overseas, Chen pointed out. Cummins has helped over 40 Chinese suppliers enter international markets, including Mexico and Southeast Asia, and these companies have shown strong competitiveness, Chen said.
Since entering the Chinese market in 1975, Cummins has invested more than USD1 billion, establishing over 20 factories and its largest technical research and development center outside the United States. Its China sales topped USD6.5 billion last year, accounting for around 19 percent of its global revenue.
Source: Yicai Global
