Business / Auto China

Sinotruk revs up factory plans

By Ju Chuanjiang and Zhao Ruixue in Jinan (China Daily) Updated: 2016-09-21 09:04

China National Heavy Duty Truck Group, the country's largest truck manufacturer by revenue, will speed up efforts to develop manufacturing facilities in countries along the Belt and Road to battle sluggish exports, a senior company executive said.

The company, also known as Sinotruk, will consider acquisitions and investment in these countries to produce diversified products locally, Yang Zhengxu, general manager of Sinotruk Import and Export Co Ltd, said on Monday.

Sinotruk currently has eight overseas manufacturing facilities in countries including Russia and Vietnam.

Two manufacturing bases are under construction, one in Nigeria and the other in the Philippines, said Yang.

The overseas manufacturing facilities have been designed with a total annual production capacity of 18,700 vehicles.

Yang said building overseas production bases could help overcome international trade barriers and facilitate its exports by providing better services.

Customs data show Chinese heavy truck companies had a 31 percent year-on-year decrease in exports during the first seven months of this year due to sluggish market demand. However, Sinotruk managed to beat the industry average, reporting a 6.7 percent year-on-year decrease in exports.

The company exported 27,000 trucks in 2015, accounting for one-third of the company's total sales. It aims to have overseas markets account for 50 percent of its overall sales by 2020.

Wang Zhile, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said decades of efforts on technological development had enabled Sinotruk to compete with global rivals.

"To be global, a company should cultivate a global value chain to make optimal use of its resources in overseas markets," said Wang.

One difficulty in tapping into a foreign market is different nations' varying laws, standards and requirements for automobiles, Yang said.

"We're diversifying our products to meet the demands of different clients, such as for customers in some African countries, our materials need to be heatproof," said Yang.

To better integrate into the local market, Sinotruk encourages its sales staff to learn foreign languages and become better acquainted with the local culture.

Yang said that the company will launch an app within the next year that is aimed at helping customers purchase its products and after-sales services in overseas markets.

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