ST. PAUL, MN (December 1, 2004)- Foreign manufacturers seeking to enter the China commercial vehicle market, or to establish manufacturing in China for export markets, now have excellent opportunities according to a report released today by Power Systems Research. Favorable industrial policies and an improving infrastructure invite new investment and development according to researchers Cord Koenig and Dan Perske who co-authored the report.

China Truck Market

Recent estimates are accounting for 140 million automobiles on Chinese streets by 2020; seven times more than at present. With already overfilled streets, the construction of new roads is one of the government's top priorities and is attracting huge investment. An emphasis on productivity means fewer but larger trucks. That strategic change, along with steady economic growth, is fuelling a boom in heavy-duty truck production according to Perske. Sales have climbed dramatically in recent months. Power Systems Research reports that China-made heavy duty truck sales have grown by 18.45% year-on-year with 197,000 units produced in the first seven months of this year. Alongside this development, efforts are being made in both the truck and bus industries to push toward more environmentally-friendly vehicles. Indications have come from all major truck builders that they will commit themselves to European emission standards in the near future.

Koenig pointed out that the potential for China's truck market is so big that even Chinese automotive giants are positioning themselves in the market by buying into truck manufacturers. Traditionally, these automotive giants have not been active in this sector, but they see this as an opportunity to capture vital business in China. For instance, the Shanghai Automotive Industry Corporation (SAIC) recently acquired Chongqing Heavy Vehicle Corporation, which is one of three main players that control the heavy-duty truck market. The other two key figures are First Automotive Works and Dongfeng Motor Works. Joint ventures with strong foreign partners are speeding up efforts in this sector.

East China's Shandong Province plans to become the largest truck producer in the years ahead. Shandong's Vice-Governor has stated the Shandong province is expected to produce 150,000 heavy trucks and buses by 2005, which would be about 35% of the country's current total. The same official has predicted the production of 250,000 trucks and buses by the year 2010 in Shandong.

China Bus Market

The population of China represents roughly one-sixth of the population of the world, making China a huge user of public transportation. As part of the public transportation network, there is a growing demand for long distance transportation. Major bus builders include: GZ-Guangzhou Bus, Shanghai, Hua Xin, Golden, Yaxing, Jin Bei, SRKC, Huanghai, Dongfeng, Zhujiang, King Long, Jingtong, Feichi, Wanza, Sui King-Eagle, and Changzhou Changjing. Although seemingly endless companies exist, they mostly operate under one of about thirty umbrella companies. Major players in the bus market normally have strong ties to western companies such as Norinco (Germany), Flexible (US), and Volvo (Sweden). Chinese production of large motor coaches is estimated to be 8,000 per year and production of medium-to-small buses is approximately 66,500.

As an emerging market for commercial vehicles China has surpassed France, to become the world's fourth-largest automotive making nation, after the United States, Japan and Germany.

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Power Systems Research is a global market research and consulting company specializing in the engine, original equipment, and components industries. Since the company was founded in 1976, Power Systems Research has been the authoritative source of market information and business intelligence to the power products and drivetrain industry. Power Systems Research is headquartered in St. Paul, Minnesota and provides market data and customized project work to the world's leading vehicle and equipment OEMs and component suppliers. The company has a global presence with operations in Detroit, Brussels and Tokyo. Further information is available at http://www.powersys.com.