Sinotruk retains positive sales momentum in overseas market

Cooperation with German partner a key factor in firm's success

Despite shrinking domestic and overseas demand, China's major commercial vehicle manufacturer, Sinotruk, still reported a positive performance in the first quarter of 2015, particularly in the overseas market.

Statistics from the China Association of Automobile Manufacturers show that commercial vehicle demand continues to decline, with domestic heavy truck sales down 33 percent in the first quarter from the same period a year earlier.

The Sitrak C7H model, a Sinotruk product equipped with an electronically controlled air suspension system, 540-horsepower diesel engine and a smart management system, was a popular exhibit at this year's Shanghai auto show.  Wang Qian / China Daily

However, Sinotruk, headquartered in Jinan, Shandong province, sold 43,000 commercial vehicles during the period, including 25,000 heavy trucks, an increase of 1.66 percentage points in market share. The company secured export orders for 10,035 heavy trucks, up by 8 percent, making it the nation's largest exporter in the sector for 10 consecutive years.

"Although the heavy truck industry is enduring a chilly winter, we still retain sales growth in oversea markets thanks to our competitive products and proactive market strategy," said Cai Dong, general manager of Sinotruk.

Cai also attributed the success to the company's smooth cooperation with its German partner MAN SE, a European leading heavy commercial vehicle maker.

When MAN bought 25 percent and one stock share of Sinotruk for 560 million euros ($624 million) in 2009, many in the industry were surprised by both the purchase and the high price paid. Several years later, the move has proved profitable, said Cai.

Benefiting from advanced technologies introduced from MAN, Sinotruk has developed a raft of popular products, ranging from light, medium, heavy-duty trucks, through special-purpose vehicles, to engines that can meet the China V emissions standard, which is equivalent to the Euro V.

"Since teaming up with Sinotruk, we have done a lot to ensure the quality of our products," said Franz Neundlinger, vice-president of Sinotruk Hong Kong, who was previously a senior executive for MAN.

"We send technological personnel to Sinotruk, while more than 200 Sinotruk employees and top managers have been trained in Europe to study MAN's production and management processes," Neundlinger said. "Quality is the key for sustainable success. We are glad to see that Sinotruk did a good job in this aspect."

The two companies' jointly developed products, the Howo and Sitrak series of heavy trucks, have reached an advanced international level.

The models received a favorable market response when they officially entered the global market in 2013 due to their high performance and safety, combined with low fuel consumption and low emissions.

The Sitrak C7H model, equipped with an electronically controlled air suspension system, 540-horsepower diesel engine and a smart management system, was an eye-catcher at the Auto Shanghai 2015, one of the country's top motoring events.

"Adopting the same production lines and quality standard as MAN, it is the largest horsepower heavy commercial vehicle so far sold in the domestic market," Cai said.

He added that the smart management system independently developed by Sinotruk is favored by many logistics companies. Its functions include navigation, remote diagnostics and fleet management, through collecting the vehicle's operating data and tracking it in real time.

With the high-end Howo and Sitrak trucks, Sinotruk is extending its sales network to developed countries, said Liu Wei, vice-general manager of Sinotruk in charge of overseas business.

"At first we mostly sold products to developing regions such as the Middle East, Africa and Southeast Asia, but now we are working to tap into high-end markets in developed countries such as Ireland, New Zealand and Singapore," Liu said.

"The Howo and Sitrak trucks have a stable client group in the high-end markets thanks to their high performance and lower price tag compared with foreign brands," he said.

Howo and Sitrak vehicles that meet the Euro V emission standards have been exported to Brazil, and sold to Hong Kong and Taiwan.

"This year about 400 Sitrak heavy trucks will be sold in Taiwan alone, which is expected to account for a 20-percent share of the high-end market known for its strict rules on emissions," Liu said.

"With the rise of public awareness of environmental protection, this environmentally friendly high-end truck will become our new driver of sales growth in the future," he said.

Sinotruk will focus on vehicles with the state-of-the-art MAN's technology this year, with their output and sales expected to account for more than one-third of the company's total. Meanwhile, it aims to increase its exports to 30 percent of the total, up from the current 20 percent.

wangqian2@chinadaily.com.cn

(China Daily 05/11/2015 page19)