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Industry News
Chinese truck makers take on global groups

Date:2015-07-28 15:38:47

International truck makers are facing increasingly tough competition from Chinese commercial vehicle companies, which have already cornered their domestic market and are now aggressively moving to the export market – especially south-east Asia and Africa.

Alix Partners, the automotive industry consultancy, said in a report released in Shanghai on Wednesday that China last year produced nearly half the world’s heavy and medium commercial vehicles.

The industry was helped by strong local demand and increasing exports to emerging markets, where China’s trucks are priced at less than half those of global truck makers.

Strong growth in production is expected to continue this year, with first-half growth of 76 per cent year on year, putting China in a position to produce 1m trucks for the first time this year, according to Ivo Naumann, head of Alix Partner’s Shanghai office.

Fuelled in part by the government’s stimulus programme, China was the only major market to show growth in the number of vehicles produced in 2009, up 22 per cent, said Alix.

This strong growth allowed China to boost its share of the global market, by volume, to 49 per cent in 2009 from 20 per cent in 2006.

Foreign truck makers will benefit from recovery in demand in Europe and North America, where Chinese trucks cannot compete because they do not meet local emission standards.

But in emerging markets – which Alix expects to produce 58 per cent of growth in commercial vehicle demand by 2014 – China’s lower cost and lower technology commercial vehicles are posing stiff competition to global truck makers.

Chinese exports of commercial vehicles, mostly to emerging markets in Africa and south-east Asia, rose 25 per cent in the first half of 2010 over the first half of last year, to 134,000 units.

“The increasing volume for Chinese [original equipment manufacturers] has provided enhanced profitability and allows for a larger commitment to R&D, which . . . will allow these domestic OEMs to compete on a global level,” the report says.

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