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At the beginning of June, Schaeffler Group stated in a high-profile manner that it wanted to open up the Chinese truck market in a brand-new attitude, and held technical exchange meetings with Dongfeng and China National Heavy Duty Truck. On May 29, the members of the board of directors of the Volkswagen Group Commercial Vehicles were Xerox and Man Trucks. Company CEO Dress visited China National Heavy Duty Truck and aims to expand the continued cooperation of Mann Engine and other projects. At the end of last year, Johnson Controls' high-end commercial vehicle seat brand RECARO began to enter China. Currently, it is cooperating with FAW-rich to produce high-end commercial vehicles. Seat... It can be seen that in the Chinese commercial vehicle market, which has always been dominated by self-owned brand components, foreign-funded parts and components companies are also accelerating their deployment.
Recently, He Mochi, executive director of the Scania China Strategic Center of the Volkswagen Group's commercial vehicle brand, stated in public: "The new normal in the Chinese auto market is exactly what Scania has been waiting for for many years."
Obviously, under the new normal, China's commercial vehicles are facing a transformation and upgrading, and the demand for high-end products is increasingly strong. As the high-end trend of commercial vehicles is gradually approaching, the new market form that foreign-funded parts and components companies are looking forward to has become prominent. This is a good opportunity for them to invade the commercial vehicle market in China.
According to statistics, from 2010, the demand for high-end heavy trucks in China is growing at a rate of 1% per year. It is expected that after 2020, the market share of high-end heavy trucks in China will reach over 10% of the total heavy trucks.
Recently, Xu Changming, director of the Information Resources Development Department of the National Information Center, pointed out the reasons for the acceleration of high-end commercial vehicle trends. He believes that, first, from the perspective of demand, China's per capita GDP is still growing rapidly, resulting in commercial vehicle purchase capacity, the value of transport materials, the driver's demand for cars will constantly upgrade. Second, from the perspective of production, China’s economy has driven its economy into an efficiency-driven phase and is now driving the transition to innovation. Third, under the pressure of environmental protection and energy, the requirements of China's fuel limits and emission regulations have become increasingly stringent. These regulations are one of the main reasons for the acceleration of high-end commercial vehicles in China. In addition, high-end commercial vehicles are more in line with current social needs in terms of environmental protection, energy saving and comfort.
“Originally when we implemented the National Third, our emissions system purchased its own brand, and now it basically uses foreign brands. The country’s five even-implemented national five-emissions standards make us realize that we must be 'flawless.'†Recently, Xia Hong, vice president of Valin Xingma Automobile Co., Ltd., said in an interview with this reporter that at present, the high-pressure pumps, common rails, and post-processing systems for the vast majority of commercial vehicles in China are all purchased from Bosch or Delphi. On March 23rd, Wang Shihong, general manager of North Benz, stated at the Test Transmission Conference of Fast Auto Transmission that the automatic transmission is the mainstream of the development of commercial vehicles in China in the future. It is reported that Fast's AMT automatic transmission was jointly developed with WABCO.
More and more heavy truck companies tend to purchase higher-end parts and components, as do light-duty truck companies. At the end of May, Pan Zhongde, general manager of Anhui Quanchai Power Co., Ltd., said in an interview with this reporter: “After the implementation of the National Fourth, the price of light trucks generally rose by 10,000 to 20,000 yuan. The increase in customer expectations for product quality has spurred light trucks. Enterprises must procure parts with better quality.†He told reporters that the cost of QuanChai five light truck engines has approached joint ventures, mainly because everyone’s core components come from the same foreign suppliers. “Most foreign-funded parts and components companies have entered China very early. In the past two years, foreign-funded parts companies such as Bosch and Cummins, which are related to emission upgrades, have seen a particularly significant increase in the Chinese market.†Kunshan Longzhong Maishigeru Auto Parts Co., Ltd. Company GM Yang Hongli told reporters that Bosch diesel common rail system and post-processing system almost monopolized the Chinese commercial vehicle market. Rolf Bu-lander, Chairman of the Bosch Automotive and Intelligent Transportation Technology Business Unit, introduced that Bosch's global diesel system sales growth exceeded 20% in 2014, and China is the most important growth market.
Due to the upgrading of product technology, the high-end commercial vehicles are currently being used. Cummins, Bosch, China, WABCO, Eaton, Federal-Mogul, Honeywell and other foreign suppliers of spare parts have outperformed the Chinese market. Han Tailing, president and CEO of Honeywell Transportation Systems, told reporters that Honeywell had made more orders in 2015. Zhao Wei, manager of ignition system engineering at Federal-Mogul Co., Ltd., told reporters that the ignition system is basically dominated by foreign companies. Federal-Mogul is supporting most of the domestic engine companies such as Xichai, Yuchai, Weichai, and CNHTC, and its market share in 2015 will grow significantly. WABCO's growth in the Chinese market has also been rapid over the past few years. In the first half of this year, WABCO's electronic brake system had more than 1,000 units on Beijing buses. Yu Sujie, president of WABCO China, predicts that China's sales in 2015 will still exceed the market average.
The time for a full invasion
The price of imported high-end heavy trucks is generally more than one million yuan, which is rarely used before. As a result, Volvo and Scania's heavy truck sales in China are very limited. The market share of commercial vehicles in China is far below expectations for foreign-funded spare parts companies. Eaton’s clutches and transmissions are of good quality, but the Chinese commercial vehicle market has been tepid. In fact, some foreign-funded parts and components companies are not satisfied with China's land and water.
But now, foreign-investment parts companies have discovered that it is time for large-scale invasion of China's commercial vehicle market. China’s commercial vehicle market is the largest in the world, and parts suppliers such as Schaeffler, WABCO, Eaton, Federal-Mogul, Honeywell, Valeo, and Johnson are undoubtedly optimistic about “China's high-end commercial vehicle marketâ€.
Yang Hanbing, president of the Schaeffler Automotive Division in Greater China, said: "The Schaeffler Group has leading products and solutions in the chassis, transmission and engine sectors of trucks and can become a reliable partner for heavy truck and commercial vehicle companies in China." Since then, Schaeffler has been to Dongfeng, China National Heavy Duty Truck to promote transmission and other products. Eaton also created a number of products such as automatic transmissions and clutches for the commercial vehicle market in China this year.
Johnson Controls has dominated the Chinese car seating market. The high-end commercial vehicle brand RECARO, which is owned by Johnson Controls, chose this opportunity to enter. It is surely aimed at the increasingly high-end Chinese commercial vehicle market, just like other foreign-funded parts companies.
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