Company's global drive
Dual approach works as bus producer is able to maintain a balancing act.
It's a long road from a bus repair factory in 1963 to the world's largest bus producer today, but Zhengzhou Yutong Bus is still gathering speed.
With group revenue topping 25.8 billion yuan (HK$32 billion) last year and bus sales in excess of 46,000 units, Yutong is looking to expand in its markets and move upstream into new markets in Europe.
Yutong was aided in its early years by a combination of abundant labour resources and government recognition of the need to upgrade its industrial capabilities, says Jiang Chaozhe, associate professor, College of Traffic and Transportation, Southwest Jiaotong University.
The company pursued aggressive growth and diversification, leveraging its bus manufacturing core and surrounding it with "heavy machinery, auto parts and real estate businesses that make it a diversified entity", Jiang adds.
China joining the WTO provided challenges and opportunities for Yutong and other domestic large vehicle manufacturers. While increased competition by foreign enterprises reduced margins, the infusion of new technologies stimulated technological innovation throughout the industry.
Vehicle companies responded to these challenges in ways similar to other Chinese manufacturers - by absorbing the technological advances of their competitors. "The way [companies such as Yutong] grow is to learn some of the core technologies of others and to provide motivation for some chief engineers to return to China from overseas," says transport industry consultant Jason Ni.