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China : Complicated, but an attractive Truck Market china truck, china truck strategy, china truck review, china truck accident alien, china truck manufacturers, china truck limited, chinese trucks, truck brand

Chinese truck market is the largest in the world which had perceived a brisk growth till 2010. However market start to slow down in 2011 and to cope with this the Chinese government introduced stimulus plans called ‘cash-for-clunkers’ scheme. The scheme granted fleet owners RMB18, 000 if they replace their heavy duty trucks between 10-15 years old. According to ACG, the scheme had limited long term impact.

The market slowdown carried on towards year 2012 mostly catalyzed by several economic policies. China's annual growth slow down by 7.5 percent in the second quarter of 2013 from 7.5 percent in the first three months of 2013 as key growth drivers continued to lose momentum towards the end of the second quarter.

The low price segment was prevalent in China before the market was open to foreign investment. Once the European players enter China along with technological advancements, the mid-segment truck market took to develop rapidly. Through joint ventures domestic players like CNHTC, FAW, DFM, BAIC and SAIC are on the course of developing potentials to take on the mid-segment truck market. This will also enable them to strengthen their positions at the traditional exports markets. Dongfeng Commercial Vehicle Company (DFCV) is the market leader in both HDT and MDT segments of China.

The Chinese policy for automobile sector ensure to protect the domestic players. Foreign companies are not permitted to have a majority stake in any joint venture. This helps Chinese OEMs to gain technical expertise. For the time being the foreign OEMs can enjoy the benefit from the growth in Chinese market since most of their traditional market growths are stagnant.

Indeed, the culture of China differs significantly from that of Western countries and this had been one of the biggest obstacle which is still relevant in joint ventures. For example, the Germans believe in merit system of recruitment wherein, even if one person is laid off in one job, the expectations that he/she can find another work is prevalent. The same is not true in China where the scarcity of work coupled with the difficulty of landing a government job is very difficult.

According to Hofstede, the main cultural dimensions in organizations include that of power distance (how employees accept hierarchy), uncertainty avoidance (tolerance for uncertainty and ambiguity), individualism versus collectivism (concern to one’s self and to the group, long-term versus short-term orientation (future goals and immediate goals), and masculinity versus femininity (personal goals and friendly atmosphere as opposed to income. On the other hand, Trompenaars have illustrated that culture has different layers: the outer layer captures an individual’s interest at first when he is experiencing a new culture; the middle layer, consists of norms and values or the sense of what is right or wrong; and the core layer which focuses on the fight for survival.

However China is a complicated market in many dimensions. It should be noted however, that there is no universal business management or economic formula to succeed in China. Despite the challenges, the Chinese market is pretty attractive and has good growth potential. All that one need is to have a good product position with an optimal strategy with cultural acceptance. The market has every ingredient for both the domestic and the foreign OEM to succeed in the long run.

For Full Report on Chinese Truck Market including negotiation style, inter cultural management etc. please contact – sales@autobei.com

Autobei Consulting Group

‘Autobei Consulting Group (ACG) ’ is a management consulting group which has leveraged on its expertise and proprietary databases to provide "Customized Solutions" in areas such ‘Sales Analysis’, ‘Business Planning’, ‘Market assessment’ and ‘Project Feasibility’ on Global Automotive Industry. Autobei Consulting Group (ACG) make use of the expertise and vast experience to deliver Cutting Edge Research Solutions.

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