CHINA REPORT
Mercedes-Benz heavy-duty truck factory in China has started mass production and its first domestic Chinese heavy-duty truck has rolled off the assembly line. The rollout reflects the Mercedes Benz truck localization project, under which Mercedes is producing heavy duty trucks built specifically for the domestic Chinese market.
The first batch of Mercedes Benz domestic heavy trucks is scheduled to be delivered to customers in early November.
In the process of localization, MB is striving to achieve a balance between high quality and cost. It is working with 150 domestic suppliers to improve manufacturing quality capability and localize the supply of more than 1500 parts. Presently, the localization rate of Mercedes Benz heavy truck Actros series exceeds 50%, and the localization rate of Actros C series is 90%.
Mercedes Benz trucks has established a Mercedes Benz business unit under the joint venture of Daimler Trucks Co., Ltd. and Foton Motor, which have a 50: 50 share ownership.
China is the largest truck market in the world, and the strategic significance of the launch of Mercedes Benz’s first Chinese made heavy truck is very important. In the opinion of Dr. Xie Houde, President and CEO of Foton Daimler Automobile, for many years, the imported trucks have been restricted by the price and a relatively single product structure and have been focusing on serving a relatively specific market segment.
Source: cvworld Read The Article
PSR Analysis: For a long time, foreign well-known commercial vehicle brands could only penetrate the niche market where middle and high-end customers purchased vehicles due to their high prices. Now, the domestic logistics and transportation industry has begun to evolve towards the direction of efficiency, intensification, low-carbon and intelligence. The market and users have increasingly strong demand for high-end logistics equipment. With the upgrading of user groups, the trend to younger user groups is obvious, and they put forward new demands for improving equipment comfort, intelligence and other equipment features.
At the same time, customers’ choice of equipment is no longer purely “cost only”, but it is more and more focused on factors such as operational efficiency, vehicle performance, and life-cycle cost accounting.
The medium and high-end market is in a transition period and has become an incremental market to be developed. Over the past two years, well-known foreign commercial vehicle brands have launched localization strategies, and domestic heavy truck brands have offered medium and high-end products.
Localization will bring several cost advantages: tariff savings after localization will reduce costs and the localization of the overall supply chain, while reducing the cost of the whole vehicle, will also achieve faster supply of parts, better prices and shorter maintenance cycles in terms of service.
With the participation of domestic products of imported brands, high-end products of domestic brands and new forces of car making, diversified participants are boosting the transformation and upgrading of China’s heavy truck industry and will also reshape the industrial pattern of the medium and high-end heavy truck market. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
