Multinational Truck Giant: What to Save the Future in China
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In 2007, multinational truck giants should not only focus their attention on share and sales. From this year onwards, they should think strategically how they can continue to gain a foothold in the Chinese market.
In 2006, the most anticipated Christmas gift from the Chinese executives of a multinational trucking company might be the “cake†of a Chinese truck market.
In the Chinese truck market in the past year, multinational truck giants collectively won 4,363 import sales and 2,24,974,178 trade volumes from January to October. This seemingly insignificant amount has actually increased over last year. 102.27% and 98.89%, a blindly optimistic speech started in the market, but they were attacked by multinational truck giants. No one wants to publish detailed data on specific sales in 2006, but only vague generalizations and forecasts.
In fact, the good news from the trucking market can not cover the overall serious situation faced by the multinational truck giants in China. Data from the Customs and the China Association of Automobile Manufacturers are all showing. From January to October 2006, imported tractors were imported. The sales volume of cement mixers dropped by 37.01% and 27.21% respectively.
The market for imported trucks, which is not much, is cracking. More and more domestic trucks have begun to fill these gaps. The rise of a collective consciousness of truck companies in China is exerting pressure on the dominant market of multinational giants; joint ventures and cooperation have not yet taken place. Out of the fog, the joint ventures and cooperation represented by VOLVO, Renault, and Dai-Ke are fortunate. Despite the fact that Dai-ke and Fukuda's Marathon-like marriage are reborn, who can tell what the future is waiting for them?
"This year will continue this trend." Industry analyst Gong Yunan said.
“Pressure is forcing multinational truck giants to regard Chinese truck companies as real opponents.†An industry expert who declined to be named said that in 2007, multinational truck giants should not only focus their attention on share and sales, from this year At the beginning, they should think more strategically how they can continue to gain a foothold in the Chinese market. â€
The rise of collectives and inevitable encroachment
Imagine eating hot pizza while drinking ice water, and now many multinational truck giants are tasting it.
From January to October of last year, in the truck-load market, especially in the heavy-duty diesel market of over 20 tons, the imported high-end heavy trucks achieved a sales volume of 3,545 vehicles and an increase of 136.81%.
“This is due to the increase in business volume of a group of high-end heavy-duty fixed consumer groups in China, which is based on the relative growth of the domestic heavy-duty truck market.†Gong Yunan believes that this group of people has a certain degree of stability. Domestic heavy trucks cannot replace this part of the demand.
In spite of this, multinational truck giants are still struggling for safety: the relative growth of trucks, tractors, cement mixers, and chassis is an absolute decline. The collective awakening and force of domestic heavy truck companies in the field of heavy trucks, who can To ensure that domestic products with price advantage will hit the high-end market one day?
The worries of the giants are not redundant.
After the adjustment period in 2005, the heavy truck market in China has resumed normal development in 2006. In the first 11 months of last year, the country had cumulatively produced 276,229 heavy trucks, an increase of 30.78% year-on-year, and 278,253 heavy trucks were sold, a year-on-year increase of 27.74%. FAW tractors showed a significant growth trend of 90.57%; Dongfeng tractors also increased by nearly 40%; China National Heavy Duty Trucks, tractors, and cement mixers all showed a rising trend, among which trucks had the highest increase rate of 66.41%; The chassis growth of Shaanxi Heavy Duty Trucks is more than 2 times, and the increase of tractors is also as high as 129.11%. Beiqi Foton Industry has an increase of 93.18%, the chassis increment is large, the growth rate of the tractor market is the first in the industry, and Chongqing Hongyan is stable. Ascending, three major categories of vehicles have all grown at different levels.
This is a collective rise of China's truck companies. Quality services are gradually connected with imported trucks, making the advantages of cost and price more prominent. This has become the driving force of the fission of the imported truck market, and it has also made this encroachment a necessity.
Data show that from January to October 2006, the total number of imported tractors was only 864, a decrease of 27.21%, and the trade volume was 50,404,286 yuan, a decrease of 24.88%.
The new scrapping system also provides favorable policy factors for domestic trucks. "If we go 600,000 kilometers or reach the 15-year trial period, we will need to scrap. In China, it is normal to run 200,000 kilometers a year. We need to scrap and replace new cars in three years. Import trucks are half as expensive as domestic trucks. The company's managers will not forget this account. What's more, currently domestic tractors, cement mixers, etc. are basically not as different from the imported cars in terms of reliability and comfort." Gong Yunan believes that in tractors, cement In the agitation market, domestic cars that have been basically equivalent to the quality of imported vehicles are increasingly occupying this part of the market. This trend will continue in 2007. Strategic adjustment is urgent
"The road of imported trucks in China will become increasingly narrow," said Gong Yunan, which is also a concern for multinational truck giants.
The cracks in the imported truck market, the gradual erode of domestic heavy trucks, the rise of truck companies in China, and the increasingly sophisticated services have increased the pressure on multinational truck giants. This pressure prompted them to start treating Chinese truck companies as real adversaries, and they also began to reflect on How can it be to save the future in China?
Dai Ke's cooperation with Futian was repeatedly crushed due to quotas; Renault and Dongfeng’s plan was also terminated for the same reason, and the cooperation between VOVLO and Sinotruk was also awkward due to the huge differences between the two parties. Today, Dai Ke and Fukuda's marriage has emerged with new vitality, but this is only a small start for Dai Ke commercial vehicles in China.
“The failure of the joint venture and cooperation in China represented by Volvo Trucks has completely declared that this road does not work in the Chinese truck market. How to enter into a joint venture with an excellent parts and components company and incorporate it into the procurement system is what they really should consider. "An industry expert showed his sharp view when interviewed by this reporter." In 2007, for imported heavy truck companies, sales were not the most important. From this year onwards, they should stand in a strategic position. Think about how to stand firm in the Chinese market, he said.
Of course, there are also different opinions. Zhang Xi, an auto analyst at Yuantong Consulting Group, believes that joint ventures and cooperation are still important choices for multinational truck giants to gain a firm foothold in China. “Although trucks are not the same as cars, Renault, Volvo and Dai-ke Many setbacks have been suffered, but localized production in China is still the only way for multinational truck giants." Zhang Xi believes that although imported trucks still have an advantage in the high-end market, especially the 20-ton or above truck market, they have little market capacity and domestic The gradual improvement of the quality of heavy trucks will speed up the process of being eroded.
Although there are still ambiguities in whether joint ventures and cooperation are conducive to the development of multinational truck companies in China, experts have reached a consensus on one point, that is, to cooperate with China's outstanding parts and components companies, integrate them into the global procurement system, and reduce costs. Lower prices to increase the competitiveness of domestic heavy trucks.
"After all, price is the biggest barrier for competition among the current multinational truck giants in China," said Zhang Xi.