Dongfeng Volvo Union Will Reshape China Heavy Truck Industry


Since the basic cooperation agreement between Dongfeng Motor Group and Volvo Group was signed on January 26th, the discussion about the impact of this strategic alliance on the Chinese heavy truck structure has been widely concerned by the industry. On the one hand, it is a “formidable alliance” jointly established by the world’s second-largest and third-largest truck manufacturers. On the other side, it is a truck market that is larger than the total scale of the North American and European truck markets. The chemical reaction between the two will be heavy. Plastic China heavy truck structure.

Consolidate the superior position of Dongfeng Heavy Truck

In China's heavy-duty truck industry, FAW liberation has always been “leading the way” with big sales and sales rankings, but its position has fallen sharply since 2010. According to data from the "China's auto industry production and sales news," last year, the total sales volume of heavy trucks by FAW Jiefang was only 105,551, ranking second from the industry's second in 2011, while Dongfeng Motor's sales reached 130,830 units, ranking the industry for three consecutive years. First, the 21872 China National Heavy Duty Truck Group, which ranks No. 2 in the lead, is 25,279 more than that of FAW, and its dominant position has become more apparent.

However, the hidden danger that may destabilize the Dongfeng heavy truck sales industry still exists. Observing the annual sales volume data that Dongfeng is proud of, we can see that the total sales volume of Dongfeng Heavy Truck dropped by 29.7% year-on-year, higher than the industry's average decline of 27.8%, which is also larger than that of Sinotruk, Beiqi Foton, Shaanxi Zhongqi, and JAC. Enterprises, especially the top three companies, have the ability to pose challenges and threats to Dongfeng’s number one status. Industry insiders believe that in the market downturn, sales of Dongfeng heavy trucks have fallen more than the average level of the industry, reflecting the fact that their products are still disadvantaged relative to certain competing products because Dongfeng is well-known for its level of maintenance service protection. Quite commendable.

Yang Jiechi, secretary-general of the Association of Commercial Vehicles of the Federation, agreed with this statement. He believes that, in terms of component parts, Dongfeng has obtained technical support for Nissan Diesel's powertrain system for commercial vehicles through its all-round cooperation with Nissan. However, the Japanese heavy truck itself has a small carrying capacity and its performance is inferior to that of European heavy trucks. The disadvantages, coupled with Nissan Diesel's use of KD assembly production methods in China, have resulted in Dongfeng Commercial Vehicles benefiting less from Nissan Diesel. Since the cooperation of Heavy Truck and Man, Foton, and Daimler in the development of heavy-duty truck engines, the relative disadvantage of Dongfeng's engine technology in commercial vehicles has become more apparent, coupled with the shortcomings of its existing transmission technology, the hidden danger is even more serious, and Dongfeng’s The R&D system is also weaker than the liberation.

However, Dongfeng Volvo's joint venture made up for the disadvantage of Dongfeng. The two parties said that Dongfeng and Volvo will conduct R&D collaboration, share R&D resources and technologies, and upgrade and upgrade Dongfeng's medium and heavy commercial vehicle platforms. They will also jointly research and develop engines that meet national V and National VI emission standards and have more advanced performance. Heavy truck transmission. The two parties also stated that they will build the Dongfeng Commercial Vehicle Technology Center into a world-class R&D center and set up a sub-center in Europe. If these measures are implemented, they will surely consolidate Dongfeng's industry advantage and lay a solid foundation for Dongfeng to become the leader in China's heavy truck industry.

Or lift a new wave of joint venture

Although Dongfeng had an all-round cooperation with Nissan, it was mainly engaged in the field of passenger cars and had a relatively small degree of joint venture in the field of commercial vehicles. The impact was small. The alliance with Volvo involved capital, Products, R&D, channels, and other aspects have also created a new joint venture case in which China is in a strong position. After joint ventures of Sinotruk and Man, Foton and Daimler, JAC and Navistar, together with Red Rock, which has long been a joint venture with Iveco, the joint venture between Dongfeng and Volvo may again trigger a joint venture.

Since half of the truck companies with top 10 production and sales companies have joint ventures, the scale of production and sales of unowned Universiade Automobiles, Hualing Xingma, Bei Ben Heavy Duty Trucks is relatively small, and the disadvantages faced in the future competition will be more, and Liberation and The pressure on Shaanxi Auto will also increase, and it cannot be ruled out that the two companies may seek joint ventures. However, Dongfeng's joint venture will set a good example for latecomers, which is that China is in a dominant and dominant position in the joint venture. In the joint venture between Dongfeng and Volvo, Dongfeng holds a 55% stake in the company and becomes the controlling party. The chairman of the joint venture is appointed by Dongfeng and uses the Dongfeng brand and Shuangfeiyan standard. Even the name of the joint venture company is designated as Dongfeng Commercial Vehicle Co., Ltd. This is unprecedented in China's commercial vehicle joint ventures and even joint ventures in the automotive industry. Even if the Dongfeng Volvo joint venture reopens the joint venture in the truck industry, the predecessor established by Dongfeng is likely to be followed.

From the current situation, even if there are joint ventures, the possibility of the combination is extremely limited. Volvo, Mercedes-Benz, Mann have already found the "Spiritual Chinese" and the rest is nothing more than the Volkswagen and Scania and Liberation of the Volkswagen Commercial Vehicle Alliance. The combination of Shaanxi Automobile and Shaanxi Automobile Co., Ltd., by contrast, does not have a large advantage in the above-mentioned possible combinations. There are also precedents for the Dongfeng to be used for comparison and the Chinese side is unacceptable for joint ventures that are unfavorable to China.

Promote industry restructuring and change

The outlook for smaller truck companies will be even worse. Yang Zaifu believes that with the upgrading of core technologies such as emission upgrades, strict inspection overload, high oil prices, efficient transportation and other core technologies such as heavy-duty truck engines, and heavy-duty trucks entering into micro-growth, even in the era of negative growth in individual years, Dongfeng Volvo's joint venture will certainly promote the Chinese truck industry. Mergers and reorganizations.

Some industry insiders believe that the Chinese heavy truck industry may form the top six in the Dongfeng Volvo, Heavy Truck Man, Foton Daimler, Liberation, Shaanxi Auto, Jianghuai Navistar, even if the smaller truck companies can joint venture, it is difficult to find the weight If you do not have a joint venture, you must have the courage to independently research and develop engines and transmissions when selling 15,000 vehicles like Valin. In the future, China's top ten heavy trucks will shift to the top six or bottom seven, as a basis for the transition to the top three or the bottom four.

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