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Self-developed technology imperative for Chinese commercial vehicle makers

As China’s heavy-duty truck sales kept on falling with the emergence of e-commerce and logistics transportation, high-end trucks that are more efficient, safer and lighter are becoming future trend of the industry. Thus, self-developed technologies are imperative for Chinese commercial vehicle makers.

The country is implementing stricter emissions standards under the pressure of environmental protection and energy conservation, which will largely boost the demand of high-end auto components.

Except FAW Group, almost all heavy-duty truck manufacturers in China such as CNHTC, DFCV and Beiqi-Foton have established joint ventures with foreign heavy-duty truck makers. Like their passenger vehicle makers counterparts, Chinese commercial vehicle enterprises tend to depend on their overseas JV partners for core auto components technologies, which grant more say to foreign parties in auto parts purchase.

The implementation of the State-IV and State-V emissions standards requests usage of advanced technologies such as high-pressure common rail and post processing treatment. However, as Chinese suppliers lack such core technologies, many commercial vehicle makers have to choose foreign suppliers such as Bosch and Delphi.

High-end vehicles demand not only high-end key components but also other high-end parts as well, which means Chinese manufacturers would hand over half of the profits or more to their foreign partners.

For example, Federal-Mogul received orders of ignition systems from major Chinese companies such as Wuxi Diesel, Yuchai, Weichai and CNHTC in the first half of the year, indicating a collapse of Chinese suppliers in certain components.

An article entitled “Thorough Invasion of Foreign Suppliers” went viral on the internet recently. Although the writer exaggerated the situation a bit, the situation described by the article may come true one day if Chinese suppliers fail to catch up.

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