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As a manufacturer of agricultural vehicles, Shandong Shifeng Group (hereinafter referred to as Shifeng) seeks independent automobile production qualifications in a rapidly changing market environment and extends its reach to the upstream light truck market to achieve the purpose of adjusting and upgrading the industrial structure. Way out. There are opportunities and risks naturally. The domestic light truck market is dominating the competition, and those who have entered the market have already been entrenched in the market for many years. Whether the latecomers can break the pattern and gain a firm foothold will not only test the wisdom of one or two business leaders.
Industry Upgrade "Test Water" Light Truck Market
Agricultural vehicle companies are involved in the automotive industry, and almost all of them use light trucks and modified vehicles as their entry point. There are many successful cases. For example, Beiqi Futian, a company that once swept away from the agricultural vehicle market with the current wind, is also fighting for the automobile industry. After igniting from the light trucks, Foton completed the layout of the entire commercial vehicle and became the target of other agricultural vehicle companies.
When the wind did not hide its desire for the automotive industry, the light truck market has been buzzing for a long time, but its commercial vehicle program has been bordering on the country's policy restrictions in recent years, due to the country's repeated construction and strict control of the car catalog. The reasons for management have not been granted to the automotive industry.
In this case, Shi Feng adopted a devious strategy: making a backdoor. As early as October 2003, when the wind signed a strategic agreement with FAW Hongta for the production of light trucks, by the end of the year, FAW Hongta light trucks were off the assembly line in the light truck car assembly plant of the Fengfeng Automobile Factory. This “curve†process made it possible The wind acquired the experience of commercial vehicle production, sales and management in advance.
In December 2005, the Shifeng Commercial Vehicle Project was approved by the State and became the last company to qualify for the agricultural vehicle industry. In May 2006, after the introduction of light-duty trucks F1 and F2 series, the company launched the F3 series light-card products at the beginning of July and basically completed the product line of “low, medium and high†gears.
According to sources close to the times, when the wind is the production base of millions of agricultural vehicles, many conditions for the production of light trucks have been met in the hardware and software environment for production and capital, and it has its own sales network and customer base. The competitiveness of light trucks cannot be compared with other manufacturers in a short period of time. At present, it is necessary to focus on the low-end market of light trucks to create pressures on competitors with cost advantages.
When the wind is clearly aware of this. Faced with fierce market competition, General Manager Liu Chengqiang of Shifeng Group told this reporter that when the wind will adopt the market strategy of “encircling the cities from the countrysideâ€, that is, based on the majority of rural areas, it will first occupy the rural market, and then gradually expand to large and medium-sized cities. market. "This will prevent direct confrontation with companies such as Futian and Jianghuai at the outset, and at the same time make use of sufficient time to develop a marketable light truck marketing method."
Although Shifeng proposes that the commercial vehicle production value should reach the long-term goal of RMB 10 billion, in the face of a strong opponent, the decision-makers at the time are cautious about the short-term goal of light truck sales. It is planned to reach 30,000 units by 2007 and reach in 2008. 50,000 vehicles and 80,000 vehicles in 2010.
Light truck industry “warmed up†to save agricultural vehicles?
In mid-2004, the new "Road Traffic Safety Law" and "The Automobile Industry Development Policy" were issued and implemented. Three-wheeled agricultural transport vehicles were renamed as three-wheeled vehicles, and four-wheeled agricultural transport vehicles were renamed as low-speed trucks. After the agricultural vehicle is under the unified management of the public security department, its tax and fee standards have changed from about 150 yuan in the past to about 3,000 yuan now, and the purchase cost of agricultural vehicles has increased substantially. As a result, the agricultural vehicle market has shrunk drastically. The production and sales volume has rapidly declined, and the entire vehicle and parts manufacturing companies are generally in semi-discontinued and suspended production.
"In the first half of 2005, although the industry has stabilized, it has not yet shaken off the downturn." Liu Chengqiang told this reporter that the increase in the use of the cost and restrictions on the roads have restricted the development of agricultural vehicles. Some potential users have selected low-grade light trucks as Production information, which is also a big reason for the current situation to enter the light truck market. It is understood that the production and sales volume of Shifeng three-wheeled vehicles, low-speed trucks, tractors and single-cylinder engines have ranked first in the same industry in the country for many years, but in recent years, it has been difficult to escape the decline in sales and profits.
The sluggish agricultural truck market in recent years has, to a large extent, confirmed the determination of agricultural vehicle manufacturers to enter the automobile production field. When the wind, Shandong Kama, Chengdu Trump, Yunnan Golden Horse, Fujian Longma, etc., have changed from agricultural vehicles to light trucks. Market competition between low-speed trucks and light trucks continues to escalate. "The country's policy control is also to guide three-wheeled vehicles and low-speed trucks, which are mainly farmers and consumer groups, and are moving toward real car consumers. This will help expand the total volume of the light truck market," said Liu Chengqiang.
In fact, not only agricultural vehicle companies are affected by the policy, but the light truck industry is also vulnerable. The environmental protection policies such as automobile emissions, car collisions, auto credits, car recalls, auto 3C certification, and brand sales, especially over-limit overloading and directory management policies, have all impacted on the survival and market development of light truck companies this year. .
However, there are statistics showing that the light-duty truck market was in good shape in the first half of this year, mainly due to the overall warming of the auto market. From January to April 2006, the national light truck market showed a tendency of climbing. The growth rate of mainstream and non-mainstream products was about 8%, slightly higher than the level of the same period of last year. In the first half of this year, the light-card market grew by more than 13%. At the same time, light-card exports also showed a good momentum. According to statistics, light-duty truck exports increased by more than 150% in the first half of this year compared to the same period of last year.
According to a survey, a large number of agricultural vehicle users have begun to switch to low-end light trucks, and light trucks will gradually enter a cyclical redemption period. Therefore, this year's light truck market is expected to increase by more than 10%.
At the same time, as agricultural vehicles are included in the same management track as automobiles this year, the country’s mandatory retirement policies for agricultural vehicles will be further implemented. A large number of farmers have started to replace automobiles, and low-end light trucks have replaced agricultural vehicles as the general trend. Rural and rural areas combine The ministry’s potential market has become the target of competition among light truck manufacturers.
Segment market is the way out
When the agricultural vehicle was born, some experts predicted that the agricultural vehicle was only a simple transitional product and would exit the market within a short period of time. However, it turns out that the total demand for agricultural vehicles under the background of rural economic development is huge. In recent years, due to various reasons, production and sales have decreased, but there are still more than 2 million vehicles in demand each year, and agricultural vehicles are still the main rural areas. The transportation tools, however, face the upgrading and replacement of products, and light trucks are one of the directions.
However, after several years of competition in the light truck market, the transparency and concentration of the industry have been very high. Seven companies such as Futian, Jianghuai, Jiangling, and Dongfeng basically divided up the current market. Moreover, since last year, China's steel prices have been showing a rising trend, domestic oil prices have also been repeatedly raised and claimed to be in line with international standards, and the pressure on light truck companies has become increasingly heavy.
"Light trucks are not as profitable as sedans and heavy trucks. It is an indisputable fact that the profits of light trucks are very thin, and there are not many means for tapping potential inside," said Li Ping, deputy general manager of Shenyang Jinbei Vehicle Manufacturing Co., Ltd. It is understood that in the international market, the gross profit margin of light trucks is between 15% and 20%, while the domestic gross margin of light trucks is only 5% to 6%.
In addition, in the next few years, major domestic cities will continue to follow Beijing and Shanghai to implement the Euro III emission standards for light vehicles. Judging from the timetable of China's environmental protection laws and regulations, the Euro III standard will be fully implemented in 2008. In 2010, it will generally converge with international regulations. “As major companies increase investment in environmental protection and energy conservation, they will inevitably increase product allocation. This will directly increase the cost of light truck companies and further affect the profitability of the entire industry,†said industry analysts.
In the face of severe reality, in order to protect profits, major light truck companies have raised the sales price of light trucks in the first half of this year. "Utilizing low prices alone does not lead to a long-term market. Light-duty trucks will continue to develop new products by improving product design, improving the quality of product manufacturing, and accelerating the development of new products. Under such circumstances, the price will be raised appropriately. Consumers There will be no conflict of mind.†An unnamed light truck manager said, “There is certainly room for profit. How could there be so many companies constantly involved in this area? China's light truck market is still very large.â€
There is a lot of space, but the competition is also increasing, and the means of competition are diversified. Since the beginning of this year, some mainstream light truck companies have successively launched load-carrying logistics products under 5 tons, and the differentiated routes of market segments have become increasingly evident. At the same time, they have paid more attention to the breadth of products and laid out a complete product line to cover the low, medium, and medium markets. High-end demand.
Some industry experts predict that with the economic development and the acceleration of urbanization, the light truck market is facing a new round of consumer upgrades and will experience upgrades from low-end economical light trucks to mid-to-high-end vehicles. High-end light trucks will be the future industry scramble. One of the biggest focuses.
The advantages of medium-to-high-end light trucks are "high-speed and heavy-duty": On the one hand, they have higher vehicle speeds when they carry the same weight; on the other hand, they have higher carrying capacity under the same speed conditions. "It can be said that with the development of economy, medium-to-high-end light trucks have become the main force in the light-card market, and they are the common consumption trend of urban transport and current domestic customers. The demand for high-end light trucks in the Chinese transport market will continue to increase. This is one of the future. Profit growth points." Liu Chengqiang said.
It seems that whoever can meet the market requirements in terms of safety, environmental protection, carrying capacity, economy, appearance and reliability, who will take the greater initiative in the future market and win more market share, thus becoming China The real leader in the light truck market.
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