Local Commercial Vehicle Firms "Going Out" to Make a Breakthrough


In the past few years, as China has grown into the world's largest auto market, China's auto national brands have also increasingly participated in the international market competition through the strategy of going global. In particular, in the past two years, China’s commercial vehicle companies have faced a persistent downturn in the domestic market, and many Chinese commercial vehicle companies have chosen to seek breakthroughs in overseas markets and have made great achievements in the export market.

However, since the outbreak of the European sovereign debt crisis, the world economic situation has been weak, and the export situation of commercial vehicles in China has also been significantly affected. Under the influence of low demand in the export market, trade barriers, and appreciation of the renminbi, after a series of years of growth, domestic sales of commercial vehicles have suffered slight fluctuations this year.

According to statistics compiled by the China Association of Automobile Manufacturers, the export of domestic commercial vehicles was 31,500 vehicles in September 2013, a year-on-year decrease of 8.12%; of which, the number of trucks exported was 25,700 units, a year-on-year decrease of 7.23%. From January to September, the cumulative export volume of domestic commercial vehicles was 303,300, a decrease of 8.07% from the same period of last year; of which, the accumulated export of goods from trucks was 240,900, a decrease of 13.10% from the same period of last year.

Fortunately, with the increasing number of overseas exports of commercial vehicle products in China and the increasingly frequent exchanges with the international market, the gap between R&D capacity and manufacturing processes of many local commercial vehicle companies is gradually narrowing and they are treating them. The perspective of export business has also begun to change. The planning of overseas markets has become more rigorous and the brand image has been emphasized. A group of commercial vehicle companies represented by Futian and Jianghuai started to upgrade the overseas market expansion model from the inside out.

In recent years, the pace of overseas investment and construction of factories by domestic commercial vehicle companies has accelerated. China National Heavy Duty Truck Corporation has been making joint ventures overseas to build factories as an important measure for its own consolidation of the international market. It is reported that China National Heavy Duty Truck has the intention of investing in factories in Nigeria, Malaysia, Russia and Iran.

In addition, since the end of last year, many truck companies, including Jianghuai, Dongfeng, Futian, and Hualing, have announced or have disclosed through the media a series of projects in Brazil, India, Russia, and other places to invest in factories. More and more businesses in China The overseas market strategy of vehicle companies has shifted from the direction of product output to product output, industrial output, and capital output.

In order to respond to the requirement that the localization rate of Brazil's auto parts should be no less than 65%, Jianghuai, Futian and other automakers are preparing to build auto industry parks in Brazil to produce auto parts and vehicles to avoid tariff barriers and achieve localization breakthroughs. It is reported that Foton Motors has signed an agreement with Brazil to establish an auto factory in Brazil with a total investment of 300 million U.S. dollars. Jianghuai Automobile also announced in August this year that the company plans to invest USD 25.5 million in Brazilian companies to increase its competitiveness in the local auto market.

FAW, one of the three giants of domestic heavy trucks, plans to establish a production base in Russia with GAZ Group, Russia’s largest commercial vehicle manufacturer, to produce and sell FAW brand heavy-duty trucks. In addition, FAW’s liberation of heavy trucks in Iran’s localization production project is also planned for implementation. At the same time, FAW also established FAW Africa Investment Co., Ltd. in South Africa to expand the existing production base of FAW medium- and heavy-duty trucks. The site selection of the factory has now been completed.

It is worth noting that although more and more commercial vehicle companies are aware of the importance of adjusting their overseas export strategies, problems such as the irrational structure of export products and unsatisfactory after-sales services still cannot be fundamentally resolved. According to data from the China Automobile Association, from January to September of this year, the main exporting countries of domestic commercial vehicles are Algeria, Venezuela, Vietnam, Chile, Peru, Nigeria, Myanmar, Colombia, Laos, Russian Federation and other regions, and the export models are still concentrated in middle and low grades.

In fact, the expansion of the vehicle's export scale depends on the change in the mode of trade. In addition, the technical content of the vehicle and the after-sales service system are particularly important.

Right now, as the economy of Europe and the United States continues to slump, more and more multinational commercial vehicle companies shift their market goals to China. With the entry of many multinational commercial vehicle giants such as Mann, Daimler, Navistar, and Volvo in succession, the prices of joint venture commercial vehicle products have continued to decline. On the other hand, China's commercial vehicle companies have also been making efforts to move products to the high-end market. A price encounter will inevitably occur, and competition pressure will gradually increase. However, at present, most domestic commercial vehicle companies still rely on foreign brands in their core technologies. Therefore, in the event of technological upgrading and future market competition, local commercial vehicle companies will still be subject to control.

With the weak performance of the world economy, the lack of recovery, and the continued appreciation of the renminbi against foreign currencies such as the US dollar, the Japanese yen and the Korean won, the Chinese automobile market’s price advantage in the world market will be weakened. In order to gain a foothold in the increasingly fierce international market, China’s commercial vehicle companies must work hard on their own research and development capabilities. Not only must they have quality products, but they must also improve their service soft capabilities in order to eventually increase their market competitiveness and achieve long-term development. The motivation.



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