– by Li Ren
To serve the fast growing high-end heavy-duty truck market in China, it is far less enough for Daimler Trucks to only establish a joint venture with Beiqi-Foton Motor. Thus Daimler has made another critical step in its China strategy by establishing Daimler Trucks and Buses (China) Co., Ltd. (DTBC).
DTBC will echo the Foton-Daimler joint venture and will target the whole Chinese truck market, or even the commercial vehicle market, according to the company.
Meet the growing demand
Daimler Trucks announced at the Auto Shanghai 2013 that the company established DTBC on April 1, 2013.
According to Robert Veit, the newly appointed president and CEO of DTBC, the new company will enhance the business of Daimler’s truck brands such as Mercedes-Benz and will enlarge the business scale into bus sector. As an independent entity, DTBC will integrate related resources of Daimler imported truck and bus business and improve operating efficiency and market response ability.
“We can set up an independent entity and operate the import business of the market only if the sales volume is reaching the standard of Daimler Group,” said Veit. “The Chinese market is full of opportunities and challenges, and that is why the Group chose to set up a new company in China now.”
As a key brand of Daimler Trucks, Mercedes-Benz trucks entered China in early 20th Century with only hundreds of sales then. Sales of Benz trucks reached 6,000 units in 2012 and has become the leader in the high-end heavy-duty truck segment for sixth consecutive years, said the company.
In 2012, China surpassed the UK and Russia to become the fifth largest market of Mercedes-Benz trucks and also the third largest import market of Benz trucks in the same year.
“DTBC is a whole subsidiary of Daimler Greater China Ltd., and I report directly to Hubertus Troska, chairman of Daimler Greater China,” said Veit. “What we are doing in Foton-Daimler is to upgrade technologies of Chinese local truck products,” said Veit.
Veit also emphasized that import Benz trucks are very high-end products and mainly used as special-purpose vehicles. “Import high-end trucks have not entered the 95 percent of China’s ordinary truck market, which is the reason why we establish the new company,” said Veit.
Tap domestic high-end heavy-duty truck market
“The new company will enhance cooperation in various business fields such as financing, Fleetboard long-distance management system and auto parts and components, and make Benz trucks appeal to Chinese logistics owners,” said Veit.
According to Veit, Mercedes-Benz Truck China has conducted a market survey in China and selected five potential segments of high-end trucks, namely the quick logistics, dangerous goods transportation, cold chain transportation, tobacco transportation and fragile goods transportation.
“Owners of these industries have higher demands on truck reliability, and tend to purchase import trucks with high value,” said Veit. “And we launched the T.C.O solution and calculator to deep analyze the cost structure of the truck whole life cycle for logistics companies and help the enterprises to optimize the cost,” said Veit.
The new company has also established a financing company to provide vehicle purchase loan to consumers. “With a ¥170,000 ($27,287) down payment and a ¥17,000 monthly installment payment, consumers can drive a Benz truck home with a longest payment period of 48 months,” said Wolf Bay, executive vice president of Daimler Financial Service China.
“We will have two different modes in the new company’s bus segment,” said Veit. “For high-end bus segment, we will import the whole vehicles with higher price and technical complexity. For bus chassis market, the company will import bus chassis to local Chinese enterprises for modification.”
(Rewritten by Jennifer Chen based on author’s article on cvworld.cn)