Despite the impact of the financial crisis, there was an oversupply of supply capacity in the freight market and the new demand was almost zero. However, just after the Spring Festival in 2009, China’s commercial vehicle market began to stage a major event.
In 2008, Foton Motors, the champion of commercial vehicle sales, announced on February 3 that it had signed a "commercial vehicle cooperation agreement" with German Daimler AG in Berlin, Germany. Both parties agreed to set up a joint venture for medium and heavy trucks in China. The company then seeks similar cooperation projects in other emerging markets around the world.
This cooperation is different from traditional cooperation methods. The Chinese joint venture company established by both parties is the operation center of the global cooperation business between the two sides. Futian Auman brand products produced by future joint ventures can be sold overseas through Daimler's sales system, while domestically produced. The Daimler heavy-duty truck engine can also be fitted to the Auman Heavy Trucks to increase the competitiveness of Auman Heavy Trucks in China and emerging markets.
Is the high-end route successful?
"Now only a cooperation agreement has been signed. The price of the product and the target market share have not yet been determined." A propaganda person in charge of Foton Motor told reporters on February 5th.
Foton Motor has not released specific product information yet, but from the development route Daimler has experienced in China for many years, this Futian Auman Heavy Truck will be a high-end heavy truck product.
In 1988, Daimler and China Corps Group set up the North Mercedes-Benz to produce high-grade heavy trucks. In 1996, Daimler and Yangzhou Yaxing Bus Group established a joint venture to establish Yaxing-Benz, mainly producing high-end large and medium-sized passengers; in 2004 Daimler - Chrysler and Fujian Automobile Industry Group set up a joint venture to establish Fujian Benz, which mainly produces high-end light passengers.
“Whether it is the Beijing Benz (Beijing Jeep) of the passenger car project or the North Mercedes-Benz, Yaxing Benz and Fujian Benz of the commercial vehicle project, it is not ideal from the point of view of the company’s operations today. The high end of product positioning is unsuccessful for each project. The main reason is that their market share in their respective sub-miniature industries has almost disappeared.†The automobile industry analyst of Changjiang Securities Research Institute believes that “For the reason, we think that the luxury Mercedes-Benz series commercial vehicles have no market in China. What people need more is cheap production materials."
The heavy truck market is intricate
Analysts’ views have been recognized by some users. Mr. Liu, who works for a state-level freight forwarding company in Shenzhen, said, “Now the competition is fierce, the prices are slightly higher, and the customers run away. In order to retain old customers, we are very cautious. Nothing to earn, and it is difficult to absorb cost pressures through other means, so we have to adjust our operations to reduce our procurement costs.†The head of logistics for a large chain company also told reporters that it is for all major regions in the country. Between the transfer of goods, the company purchased more than a dozen heavy trucks, all of them are buying low-priced products.
From the trend of the heavy truck market in 2009, the prospects for high-end new products are not optimistic. The industry estimates that the total demand for heavy trucks in 2009 will be 300,000 units. The market sales will be basically the same as in 2006, and it is expected to drop by about 45% year-on-year. In addition, with the slowdown in economic growth, the decline in exports and domestic demand led to the shrinking of logistics and the “supply oversupply†in the freight market. At present, the phenomenon of stopping the operation of vehicles has already appeared in some areas.
Are there any favorable factors? How large is the series of measures introduced by the government to stimulate domestic demand to promote the heavy truck market? According to an analysis report from China Heavy Duty Truck Network, the country's investment has only good news for some models, including dump trucks (earth and stone transport), some tractors (transportation of building materials), special vehicles and some types of construction machinery. (Earthwork). The positive factor that can be affirmed is the fuel tax levy. A heavy-duty truck driver told reporters: "After the fuel tax levy, a heavy truck will be able to reduce a fixed fee of several tens of thousands of yuan a year."
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