China is expected to sell 1.27 million medium and heavy-duty trucks in 2010, up 42 percent year-on-year, said Gary Huang, president of Dongfeng Commercial Vehicle Co.
According to Huang, China now produces about 50 percent of world’s medium and heavy-duty trucks. Local Chinese manufacturers are playing a dominant role by taking up lion’s share of 99.5 percent in China. The remainder of the market is shared by European and Japanese heavy-duty vehicle makers, such as Daimler, Volvo, MAN, Scania, Isuzu, Hino and UD.
Huang explained that it is the performance/price ratio that contributes to the dominance of local Chinese truckmakers. “Price is still one of the most sensitive and decisive factors for the success of a truck brand,” said Huang. “Local Chinese trucks usually retail at about ¥300,000 while European and Japanese brands average between ¥500,000-¥600,000, with some even as expensive as ¥1 million.”
With the arrival of new entrants as well as more localization efforts from foreign truckmakers, the competition in the Chinese medium and heavy-duty truck market will become fiercer. “Mergers and acquisitions in the Chinese truck industry are inevitable,” said Huang.
To meet the increasing demand on high quality, fuel efficiency, low emission, safety and durability, Huang said that there will exist more opportunity of cooperation between local Chinese truckmakers and multinational truck giants as well as between OEMs and suppliers. “This market-based cooperation will produce synergy effect so as to further lower cost and better satisfy the needs of our customers,” said Huang.