On July 16, 2009, the global truck giant German MAN signed a series of legal documents with Sinotruk, a leading company in China's heavy-duty truck industry, and reached long-term strategic cooperation on the technical and capital level. MAN, while granting exclusive technology licenses to CNHTC, also spent 560 million euros to obtain 25% plus one share in Sinotruk. As the second largest foreign investment case in China’s automotive industry history, the cooperation mode of the transaction attracted attention, highlighting the characteristics of China’s heavy truck (commercial vehicle) market that is different from the passenger car market and the corresponding cooperation model between Chinese and foreign companies. Adjustment. The Sinotruk-MAN partnership in 2009 is similar to the BAIC-Daimer joint venture in that the more environmentally friendly new heavy trucks that have been retrofitted with MAN's technology will still be sold under the CNHTC brand. What is different from the past is that this time the cooperation has further broken through the original joint venture model. It is a strategic approach to attracting investment. The Chinese side has maintained an absolute controlling position, allowing companies to operate in accordance with the historical mode of inertia and giving full play to the Chinese management. Localization, market, product understanding. Wood pellet packing machine ton per bag wood pellet bagging machine, which is specially used for packing the finished wood pellets into small bags . Pellet Packing Machine,Pellet Packing Equipment,Wood Pellet Pouch Packing Machine,Pellet Weighing Packing Machine Shandong Kingoro Machinery Co., Ltd , https://www.kingoromachine.com
Sinotruk-MAN's Transactions
The high growth of China's heavy truck industry in recent years has increased the relative importance of the Chinese market. The heavy truck market in China has achieved rapid development since 1999. The average annual sales growth rate in the past 10 years has been as high as 70%, which is unprecedented in the history of world heavy truck development. In 2008, the sales volume of heavy trucks in China reached a peak of 540,448 vehicles, which was 11.3 times that of 1999.
The economic crisis that engulfed the world in the second half of 2008 also hit China's heavy-duty truck industry. However, compared with other major auto markets, China still stands out.
The year-on-year growth rate of heavy truck production in major automobile markets in 2008 (%)
Source: OICA
After experiencing a brief downturn in the second half of 2008 and the first half of 2009, driven by the government’s 4 trillion economic stimulus policies and new infrastructure investment, China’s heavy truck market is expected to return to high-speed growth.
The cooperation between MAN and China National Heavy Duty Truck Corporation reflects their mutual confidence and interest in the future growth of China's heavy truck market. MAN, which ranks second in the heavy truck industry in Europe and third in the world, has been slow to invest in the Chinese market, lagging behind major international competitors Daimler-Benz and Volvo. Both Daimler-Benz and Volvo have actually invested in establishing joint ventures with Chinese partners to invest in the Chinese market. Although MAN had a technology transfer agreement with Shaanxi Auto, Zhejiang Neoplan and others, it was the first time for direct investment.
For China National Heavy Duty Truck, as the domestic industry leader, through in-depth cooperation with MAN, you can take the initiative in future industry development. The implementation of the 2008 China III standard foreshadowed the trend of more environmentally friendly development in the heavy truck industry in China, which puts higher requirements on the technology of the vehicle platform and engine. The cooperation agreement with MAN took MAN's world-leading use rights of the production technologies of Euro III, Euro IV and Euro V engines into the scope of cooperation, and solved the problems of the next three generations of environmentally-friendly truck production technologies of China National Heavy Duty Truck once and for all. .
Sinotruk-MAN's trading method: unique in the history of capital cooperation between Chinese and foreign auto companies
In the passenger car market, "the ratio of 50:50 equivalency, and then the direct introduction of foreign models in the domestic production, and finally in foreign (joint venture) brand sales in the country", has almost become the standard model of Chinese and foreign vehicle companies capital cooperation. As China’s “Automobile Industry Development Policy†stipulates that the total number of Chinese-foreign joint-venture production enterprises of auto vehicles, the proportion of Chinese shares may not be less than 50%, and foreign companies that occupy technology and other core advantages are also unwilling to make concessions on equity.
Therefore, since the establishment of Shanghai Volkswagen, the first joint venture company in China in 1985, the majority of the joint venture models adopted by Sino-foreign joint ventures in the field of passenger vehicles have been 50:50. The joint venture established a production line in China and introduced foreign models directly. When selling, the company will mainly play foreign (joint venture) brands.
In the commercial vehicle market including heavy-duty trucks, this standard model in the field of passenger cars has not replicated successfully. The first joint venture project of the heavy truck industry was Shandong Huawo, which was established by China National Heavy Duty Truck and Volvo in 2003. Both parties hold 50% of the shares.
This project almost completely duplicates the joint venture model in the field of passenger cars. It exports technologies and brands from abroad, and produces and sells its high-end products locally. However, the sales volume of Volvo's high-end heavy trucks in China is very limited. Shandong Volvo's annual sales volume is only about 100 vehicles in the later period, which eventually caused the project to stagnate.
In addition, around 2003, the joint venture negotiations between Daimler-Benz and MAN respectively with FAW Group and Shaanxi Automobile Group ended in the end and they all failed to reach a consensus on how Chinese and foreign parties would handle their own brands. The standard mode cannot be copied.
The underlying reason behind this phenomenon is that the value orientation of Chinese consumers brings greater discourse power and bargaining power to local heavy truck companies. In the field of passenger vehicles, Chinese and foreign consumers have little difference in demand, comfort, and safety requirements. Chinese consumers may have to pay more for higher performance, and the joint venture will directly introduce models. The pattern is easier to succeed.
Different from passenger cars as consumer goods, heavy trucks as a means of production, Chinese consumers (mainly transport companies) are far more sensitive to prices than the comfort requirements, so the best-selling models in Europe and the United States, it is It may be because there is no market in China because of excessive prices.
For example, MAN's high-end heavy trucks are generally priced at 100,000 euros, while in China, heavy trucks at the same level often cost about 300,000 yuan. In fact, China's domestic heavy-duty truck products have been adhering to more than 80% of the market share for many years.
January-May 2009 Heavy Truck Business Sales Ranking
Rank Manufacturer Brand Nature Market Share
1 China National Heavy Duty Truck 31.29%
2 FAW Group (liberation) native 13.57%
3 Shaanxi Auto Group Domestic 13.18%
4 Dongfeng Motor Home 12.86%
5 Beiqi Foton (Ouman) Local 8.34%
Total 79.24%
Source: Commercial Car World Network
In the past two years, foreign heavy truck companies that have learned lessons have changed their strategies and began to adopt more flexible ways to cooperate with Chinese companies.
Dual-brand joint venture operation.
In 2007, SAIC, Iveco Italy and Chongqing Hongyan formed a three-way joint venture company to use Iveco's technology to transform Hongyan products. It is worth noting that the joint venture is the first to implement a dual-brand operation. Both Iveco and domestic Red Rock brands will simultaneously exist.
Single (domestic) brand joint venture operation.
In 2008, Beiqi Foton and Daimler-Benz formed a 50:50 joint venture company to use Mercedes-Benz's technology to improve engine quality, but the joint venture's heavy-duty truck product will hit Beiqi's own Auman brand.
Single (domestic) brand investment operation
Of course, taking into account MAN's needs and interests, China National Heavy Duty Truck also applied specifically to the Hong Kong Stock Exchange for a first-time waiver of the public shareholding ratio of less than 25%, ensuring that MAN can nominate 4 out of 17 board members. right
The evolution of Sino-foreign cooperation model in heavy truck market.
Conclusion and suggestion
With the further growth of the heavy-duty truck market in China and the further promotion of environmental protection requirements by national policies, cooperation between Chinese and foreign companies in the field of heavy-duty trucks will further increase. The expansion of China's heavy truck market will force international giants to pay more attention to their business expansion in emerging markets. The increase in environmental protection requirements has increased the demand for advanced technology of Chinese heavy truck companies for foreign companies.
For international giants, the cooperation needs to be based on the recognition of China’s actual industry leadership position and abandon the so-called “successful experience†in the passenger vehicle field.
Given the current market environment of commercial vehicles in China, foreign high-end heavy truck products are difficult to become market-oriented, and therefore it is difficult for foreign parties to force China to abandon its own brand (Model 1). Models 2, 3, and 4 can be a realistic choice for cooperation negotiations. . In the long run, the foreign side should first assist the Chinese partners in gaining market leadership through strong alliances, and then gradually introduce their own products as the consumer environment changes.
For the Chinese side, the characteristics of China's heavy truck (commercial vehicle) market have created rare conditions for building world-class independent brands. The “market for technology†in the field of passenger vehicles, but the tragedy that eventually lost the market, did not reach technology, and did not establish its own brand would be avoided. It should make full use of the advanced technologies of foreign partners to create newer, safer and more reliable new technology models. Utilize the global sales network of foreign partners to capture the mid- to low-end heavy truck market in the world.
View related topics: Joint venture hot car
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