After a lenghty period of subdued growth, China’s commercial vehicle market is on the rise again.
Driven by a flurry of new infrastructure projects, unit shipments – which stood at 2.65 million in 2014 – are estimated to reach 3.63 million by 2022 at a compound annual growth rate of four per cent, according to a new report by consultancy Frost & Sullivan.
“Till recently, sales of light, medium and heavy-duty commercial trucks in China were at an all-time low owing to a slow economy and the lack of innovative design ideas,” commented Frost & Sullivan Automotive and Transportation Research Analyst Chan Ming Lih.
“[But a] growing number of businesses and the e-commerce trend sweeping the country are now creating new opportunities for postal delivery and logistics services in primary and secondary industries. Hence, the adoption of heavy duty trucks and last-mile delivery light-duty vehicles is on the rise again.”
Lih said as purchasing power goes up again, end users, fleets and leasing enterprises in China are increasingly demanding vehicles incorporated with sophisticated features.
“As a result, offering a competitive selling price, ensuring strong aftersales services, and improving technology and supply chain features will allow participants to expand their share in the Chinese commercial trucks market.”
The need for value-added solutions will reportedly centre on vehicle service and maintenance, financing, insurance and telematics-based fleet management – prompting local OEMs to rethink their current portfolios.
“The Chinese commercial truck market is evolving from a basic, original equipment sales, trade, leasing and financing model to an advanced logistics solutions entity,” said Frost & Sullivan Automotive and Transportation Research Analyst, Lai Jia Yong.
“OEMs must focus on reducing component variations across product lines to enhance their value proposition. Although end users will favor Chinese suppliers over international brands, increased collaboration between domestic and foreign companies will be critical for technical innovation.”