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Dongfeng throws down the gauntlet at CCVS as it tries to take back leadership position

Dongfeng Motor Corp., China’s leading commercial vehicle manufacturing and parent company of Dongfeng Commercial Vehicle Co., Ltd. (DFCV), China’s second largest medium and heavy-duty truck manufacturer, had a major product and brand offensive at the annual China Commercial Vehicles Show (CCVS) held in early November in Wuhan.

There was no coincidence: the annual CCVS that alternates between Guangzhou and Wuhan happened to be in the hometown of Dongfeng this year, and it took advantage of home field to cook up several “main courses.”

Not only did DFCV showcase seven of its top selling models with the latest engine and light weight technologies, Dongfeng’s other subsidiary – Dongfeng Special Commercial Vehicle Co. Ltd. (DSCV) – used the occasion to launch a new brand – Huashen.

It may have been two years in the making and it was such a spectacle that Dongfeng Chairman Zhu Yanfeng and Dongfeng President Li Shaozhu were on hand to witness the events, showing the significant role that commercial vehicles are playing for the company.

The new Huashen brand adds to the existing Dongfeng and Chenglong commercial vehicle brands and represents one of a few dedicated special-purpose vehicle brands on the market. The move is simply trying to move up DSCV on a par with DFCV and Dongfeng Liuzhou Motor (DFLZM), which produces the Chenglong brand trucks.

Having an arsenal of three brands in the medium and heavy-duty truck is obviously Dongfeng’s tactic of trying to get back its leadership position in the sector, which it relinquished to FAW Jiefang in 2016. The recent CCVS obviously was a stage that Dongfeng used to rejuvenate itself.

That is not to discredit what DFCV has achieved so far this year. In the first 10 months, DFCV sold 145,304 medium and heavy-duty trucks, up 39 percent year-on-year, according to the latest data reported by the company. That is already more than what were sold in all of 2016 and the company has upped its sales target for medium and heavy-duty trucks in 2017 to 170,000 units. Granted that all boats went up with the tide driven by a favorable policy environment, DFCV’s growth was in part due to the company’s rapid response to market needs, timely expansion of capacity, adjustment of product mix, reduction of cost and effective sales and marketing activities.

But compared to FAW Jiefang, DFCV is still quite a ways off by several tens of thousands of units. It will be interesting to see how the two will fare next year, whether it will be a neck and neck race, one extends the lead over the other or one takes back the top spot.

For now, DFCV can bask in the recent limelight at CCVS and enjoy the rest of 2017. But then comes the challenge in 2018 as policy effects wane and market returns to normal.

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