China Commercial Vehicle Export Market Analysis


In recent years, China's auto exports have continued to grow at a high rate, and commercial vehicles are still the main exporters, namely, trucks, large and medium-sized passenger vehicles and special-purpose vehicles. The export volume of commercial vehicles accounts for 65% of the total automobile exports, and the export amount accounts for 72% of the total. According to the latest statistics, from January to August 2007, the cumulative number of auto exports was 354,900, an increase of 65.21% year-on-year, and the cumulative foreign exchange earned through exports was US$4.102 billion, an increase of 118.5% year-on-year. Among the major auto export categories, commercial vehicles have become the main force, of which the total number of trucks exported was 146,600, an increase of 52.63% year-on-year; and the cumulative number of passenger cars exported was 48,100, an increase of 233.64% year-on-year. The export of "special-purpose vehicles" with high value is also very prominent. The export volume accounts for only 5.28% of the total number of auto exports in China, but the export amount accounts for 28.65% of the total amount. The number, amount, and year-on-year growth of exports exceeded all the previous year.

Since 2007, the acceleration of the export speed of trucks, large and medium-sized buses and special-purpose vehicles in the commercial vehicle sector has not only allowed manufacturers to see a huge global potential market demand, but also felt that the competitiveness of self-owned commercial vehicles is increasing. appear.

Obvious advantages

At present, the export of domestic commercial vehicles has the following advantages. First of all, the core competitiveness of China's manufacturing industry is labor costs. China's labor costs are equivalent to 1/32 of the U.S. and 1/20 of Japan. Second, after years of development, China has formed a relatively sound upstream and downstream industry for the production of commercial vehicles. Third, China's commercial vehicle manufacturing technology is mature; Fourth, commercial vehicle companies have independent intellectual property rights and independent brands; Fifth, domestic commercial vehicles are more suitable for the needs of developing countries; Sixth, China and the developing countries have friendly relations. Political relations and evolving economic ties.

Bus demand is huge

According to the data, in August 2007, the number of passenger cars exported from China was 0.95 million, an increase of 15.49% over the previous month and a year-on-year increase of 176.25%; and the passenger car industry is currently dominated by independent brands, and the pattern is relatively stable, with strong price/performance advantages and international Competitive Advantage.

In the next five years, international large and medium-sized passenger cars will generally maintain a steady growth. Among them, the demand for passenger cars in Western Europe and North America is basically saturated, the demand in Eastern Europe is huge, and the number of passenger car renewal and retention is large, of which Russia is the main market; Oceania’s strong market demand, the fastest growing markets in Africa and the Middle East, will become the largest increase.

The economic strength of the demanding regions is matched with the prices of Chinese passenger cars. At the same time, these countries have a large population and a large demand for passenger cars. Taken together, Asia, Eastern Europe, Africa, and the Middle East have large demand for large and medium-sized passenger cars. The demand for domestic passenger car companies in Eastern Europe, South America, and other regions that can be accessed by these companies amounts to approximately 165,000 vehicles. China's passenger car exports have a huge potential market. It is estimated that the total global passenger car demand will reach 250,000 by 2010. With scale and cost advantages, Chinese passenger cars will gradually expand their exports in Eastern Europe, South America, Africa and the Middle East.

Leading companies Yutong Bus and Jinlong Automobile will fully benefit from the growth of domestic and international demand in the industry. Yutong and Jinlong have the potential to become world-class passenger car companies. Golden Dragon Motors is the major beneficiary of China's light passenger export acceleration. The company’s holding company’s Xiamen Golden Lion’s Haishi series of light passengers and the body companies that produce light passenger cars will have better-than-expected results in 2007.

The driving force of heavy cargo growth

All along, China’s heavy cargo products have always dominated the export of Chinese automotive products because of its technological capabilities and competitive price advantage. According to the statistics of the China Automobile Association, the number of trucks exported in August 2007 was 23,700, an increase of 29.47% from the previous month and an increase of 41.19% year-on-year; according to the amount of exports, the amount of goods carried was 235 million US dollars, accounting for the total export amount. 30.83%. Trucks still rank first in China's auto exports. The truck industry is in a clear superior position in the auto R&D field in China. With the increasingly frequent exchanges with the international market, the gap between China's trucking companies in research and development capabilities and manufacturing processes is gradually narrowing. At present, some trucking companies have made expanding overseas markets the top priority for next year.

Despite the rapid growth of heavy cargo sales since 2007, the cyclical nature of the heavy cargo industry has caused many industry insiders to predict in advance that the growth of heavy cargo sales will suffer from fluctuations in the industry's economy.

In the second half of 2007, due to the monthly increase in the base value of the same period of last year, the monthly sales growth will gradually decline, and the growth of heavy cargo sales will show greater volatility. Judging from the history of heavy cargo sales, 2007 was the second year of the “Eleventh Five-Year Plan”. Most of the infrastructure investment projects started in 2007, and the start-up of infrastructure projects also stimulated the sales of heavy goods.

Does the expected end of the economy bring heavy losses to the heavy cargo industry? Most people in the industry are more optimistic and believe that exports will be an important growth driver for the Chinese heavy industry. The reasons are:

1. Domestic and foreign manufacturers have a large price gap between heavy goods, domestic heavy cargo prices are only 1/4 to 1/3 of foreign prices, and in the global medium and heavy cargo production distribution, China accounts for 22%, and is the world’s major medium and heavy cargo production base. Strength can not be underestimated.

2. Under the expectation of a possible fall in the growth rate of heavy cargo in 2008, leading players in the industry, such as Sinotruk, Shaanxi Zhongqi, etc., can still maintain growth. The decline in the industry-wide growth rate is mainly reflected in the decline in the growth rate of heavy cargo sales in certain enterprises or absolute The year-on-year decline in the number, while more than 15 tons of leading enterprises Sinotruk, Shaanxi Heavy Duty Truck can still rely on the scale advantages, the continuous expansion of export volume to achieve the year-on-year growth in sales, when the domestic demand weakens, the increase in its export volume will effectively resist the industry cycle risks of.

Light and micro-exports grow steadily

Through the development in recent years, China’s export of light and micro cargo (≤5t trucks) has also become a new force for China’s auto exports. From January to August 2007, the cumulative export volume of light and light goods was 54,672 units, accounting for 37.45% of the total exports of goods vehicles; the trade volume of light and micro-goods was 344 million US dollars, accounting for 28.47% of the total export trade volume of goods vehicles. The importance of light and micro-exports in China's auto exports has gradually emerged.

The steady growth of the export market for light and micro goods stems from the strong performance of light and micro production enterprises in China. These companies have also tasted the sweetness of the light and micro-export market while creating brilliant business. Fukuda, Dongfeng, Jianghuai, Zhongxing, Chang'an, and other major exporters of light and micro-cargo products also rank among the top in the sales volume of the corresponding models of the China Automobile Association. In the favorable export environment, major domestic light and micro-production companies have invested more in product exports.

Jianghuai Automobile has made exporting as one of the key points, transformed the service marketing model, adjusted the organizational structure and management methods, and established the overseas business division under the original sales company as an independent company. In terms of product structure, Jianghuai has also adopted A single light cargo export spreads across the entire product line.

ZTE’s pace seems to be faster in the development of overseas markets. In the first half of 2007, ZTE's exports have embarked on a regular development path and achieved two major breakthroughs. The first breakthrough was the development of the U.S. market. ZTE's existing U.S. technical experts have more than 20 people and are all involved in the daily development of products. Currently, ZTE’s new generation of products has passed safety standards for collisions in the United States. This shows that ZTE’s products have completed a substantive work from product development to market demonstration in the process of going to the US market. Another breakthrough was the breakthrough in export products. ZTE’s 500 U.S. shipments of U.S. exports to Ukrainian products in recent days differed from most of the previous export products in that they were cheap and low-end products. The leather goods exported this time were ZTE’s high-end products. Equivalent to more than RMB 90,000.

Light and light cargo companies have begun to look to overseas markets where development prospects are even broader. In the development of the past two years, China’s target markets for light and micro-exports have involved the Russian Federation, the Middle East, Southeast Asia, North Africa, West Africa, Central and South America, and other countries and regions. The export form has also gradually developed from a single vehicle product export. To combine the export of KD parts, export of technology and export of capital.

Deficiency

Although China's commercial vehicle exports have maintained a good momentum of growth, some areas still have inherent deficiencies: insufficient research and development stamina, insufficient talent pools, lax product quality control systems, huge follow-up funding gaps, and lack of brand building on the right track. Vehicle exports bring a lot of variables. However, the above factors are only concomitant in the development of history and can only be resolved during the development process. It is by no means an effort overnight. The more immediate problem is that the external factors that restrict the export of domestic automobiles have become increasingly prominent.

1. With the increasingly frequent exchanges of international automobile logistics, the volume of transportation is increasing day by day. Domestic exports are generally faced with the problem of logistics transportation. Mainly manifested as lack of transport capacity of automobile ro-ro ships. Although there were orders and products were produced but could not be shipped, this phenomenon was particularly prominent in the first quarter. The Ro-ro ship is a special type of transport ship, which is specially used for the water transport of the whole vehicle. Compared with the general way of water transport, it has the advantages of high loading and unloading efficiency, low requirements for the wharf, and transportation cost saving; and ordinary container transportation. Compared to the method, its transportation cost can be reduced by 20% to 30%, and the vehicle breakage rate is low. In the early years, domestic autos were mainly used to meet the domestic consumer market. Auto-robots have always been the patents of foreign auto giants to enter the Chinese market. In addition, they are expensive. So far, auto-robots are still a favorite of domestic ocean-going companies. With the rapid growth of the export of self-owned brands, the bottleneck of automobile roll-on ships has become increasingly prominent.

2. The orders currently obtained by domestic auto companies in foreign countries are basically small-volume and non-scheduled contracts. Most large-scale ro-ro ships abroad can load more than 6,000 vehicles. The huge contrast between the two has led to the use of Japanese and Korean domestic auto exports. The company's remaining accommodation is assembled. One has a high marginal cost and lacks bargaining power. Secondly, Japanese and South Korean shipowners take occasional stops at China's ports. This in a sense causes domestic automobile exports to rely on the weather to eat for a long period of time, and it is difficult to grasp the timing of exports. Lifeblood control is in the hands of shipping companies in Japan, South Korea, Europe and the United States. China’s China Shipping Group once purchased a second-hand ro-ro ship from Japan. However, it is difficult for one ship to match routes, and it takes more than 30 days to reach a destination in the Middle East from the domestic alone. In addition, domestic companies have small orders and destinations. It is too dispersive and ultimately difficult to operate. It is not allowed to rent the ship back to the Japanese shipowners. It fails to break the Japanese and South Korean shipping companies’ right to speak on China’s auto exports.

3. The destinations of China's commercial vehicle exports are mainly in the Middle East, Latin America, Africa, and Central Asia. Export cars belong to medium and low-end cars. High freight rates raise the price disadvantage of domestic cars. On the one hand, it is a booming automobile export business, and on the other is the restriction of ro-ro shipping capacity. Domestic ocean-going companies are not simply buying ships. It is a simple matter how to enter into a benign operation to achieve mutual win.

4. As China's market economy country status is increasingly recognized internationally, China has conducted negotiations on free trade areas with many countries and regions. The free trade zone is a new thing for Chinese companies. There is not much to know and less to understand. Most domestic auto companies have just eased from the subsistence and subsistence levels in the market, and there has been a blind spot in the vast sea of ​​international markets. What are the preferential policies for free trade zones and what can companies enjoy? Auto companies are basically black at first sight.

5. Due to the small size of enterprises and the consideration of controlling risks, domestic commercial vehicle companies are afraid to invest in exporting countries to establish sales and maintenance channels, and most of them are authorized to buy out the local agents. The consequences of this model lead to domestic enterprises and exporting countries. There is a disconnect between consumers, unable to give feedback on consumer opinions in the first place, and it is impossible to obtain profits from after-sales services.

6. Currently, it is still at the strategic stage of trading methods marked by product exports. The unsound after-sales service system is due to the problems associated with this type of trade method. Therefore, preparations for large-volume access to the entire automobile market in the trade mode are not yet ready. In terms of technical reserves, in addition to import packages, key components such as commercial vehicle engines, transmissions, and chassis basically use domestic auxiliary products with a relatively low level of overall technology. With the rapid growth of vehicle exports, the low technological content of vehicles will inevitably become a bottleneck restricting China’s auto exports. In terms of industry characteristics, Japan has hybrid electric vehicles (HEV), the United States has fuel cell electric vehicles (FCEV), Brazil has mixed fuels (ethanol), EU has high pressure common rail diesel engine technology, active and passive safety technologies, etc. The automotive industry lacks the characteristics of the above-mentioned national automobile industry.

7. Judging from the export situation in recent years, the export structure of commercial vehicle products is irrational, the price of products is too low, the decentralization of exporting countries, the lag in marketing and service networks, and the lack of brand strategy have not been well resolved. The gap between brand building and service quality of foreign brands is largely caused by the “internal consumption” among exporting companies.

Suggestions

1. Regarding the lack of capacity of auto-roofing vessels, it should be considered that the National Development and Reform Commission and the Ministry of Commerce should take the lead to follow the Japanese and South Korean government's policy support for auto exports, or adopt tax incentives for shipping companies so that the company can expand its ro-ro fleet. The so-called troops and horses do not move, food and grass first, only the ro-ro ship is at the forefront, and car exports can be upgraded from a strategic point of view. To solve these problems, it is necessary to hold fewer meetings and implement more, and to show efficiency is the most important thing!

2. When auto companies enter the international market, they can no longer just focus their eyes on automobiles. They need to consider more policies than automobiles, analyze the international trading environment, avoid exchange rate risks, accurately assess the policy risks of exporting countries, and timely adjust the product structure and market. Positioning, making good use of the free trade zone policy, and getting through the negotiation results can greatly promote car exports. At the same time, it also needs a variety of non-car professionals to fill the sales force.

3. Domestic companies must change the concept of heavy sales and light services. The establishment of a brand distribution network directly by the manufacturer will be the development trend of the sales market. It will comprehensively plan sales strategies, establish its own brand sales and service network, and firmly hold the initiative in its own hands. Must consider building its own sales and after-sales service system. Otherwise, one day overseas distributors suddenly picking their hands, the situation is not the general passive, and from the long-term brand building, this step is not to go.

According to the plan of the Ministry of Commerce, the goal of the Chinese auto industry is to achieve 10% of the world's total automobile trade in 10 years, with an export volume of approximately US$120 billion. From the current point of view, the improvement of the quality of automobiles and the improvement of manufacturing processes need to be gradual and time-consuming, and the above external factors can be solved immediately and the sooner the better.

In summary, China's commercial vehicle exports have a larger market space. The core competitiveness of China's manufacturing industry is labor costs, so a certain extent of raw material price increases and RMB appreciation are not enough to have a decisive negative impact on auto exports. The specification of automobile export order is conducive to expanding exports. It is expected that the trend of “going global” for Chinese autos will not change in the near future. Vehicle exports will continue to be dominated by commercial vehicles in the short term, and the export market will be diversified. The export of cars will increase substantially. The total volume of exported vehicles in 2007 will exceed 2006, but the increase will decline. In the long run, the expansion of the vehicle export scale will depend on the change in the trade pattern, the technical content of the vehicle, and the technical input and technical reserves of the domestic automobile industry. Raising independent R&D capability is the only way for auto companies to go abroad.
View related topics: Commercial Vehicle Export Analysis


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