In the face of the new changes in the global economic situation, Foton Motor and Daimler reached a cooperation on the localization of Mercedes-Benz heavy truck in view of the development opportunities of the domestic commercial vehicle market and the high-end heavy truck market in China.

On December 2, Daimler Trucks ag and Beiqi Foton Motor Co., LTD jointly announced that they will invest 3.8 billion yuan to produce and sell Mercedes-Benz heavy trucks in China.  The new heavy-duty tractor will be manufactured by the joint venture of the two companies, Beijing Foton Daimler Automobile Co. LTD.

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It is understood that Mercedes-Benz heavy truck for the Chinese market and customers tailored, will be located in Beijing Huairou, mainly for The Chinese high-end truck market.  Production of the new model is scheduled to begin in two years at the new truck plant.

Meanwhile, Daimler Trucks will continue to import other models from its Mercedes-Benz Truck portfolio into the Chinese market and sell them through its existing dealer network and direct sales channels.

Public information shows that Foton Daimler is Daimler Truck and Foton Motor in 2012 with 50:  Aoman ETX, Aoman GTL, Aoman EST, Aoman EST-A four series, including tractor, truck, dump truck, all kinds of special vehicles and other more than 200 varieties.

In the first three quarters of this year, Fukuda Sold about 100,000 trucks, up nearly 60% from a year earlier, according to official data.  From January to November this year, auman heavy truck sales of about 120,000 units, year-on-year growth of 55%.

Analysis of the industry that as China’s logistics industry concentration increasing, large fleet with increasing the proportion of corporate customers, the needs of users upgrade drive heavy card to accelerate the upgrading of industrial structure in China, high-end, low carbon technology, led products whole life cycle of usage scenarios and management become the development trend, the above factors are mercedes-benz localization of heavy truck laid a foundation.

It is understood that in 2019, the Chinese heavy truck market sales reached 1.1 million units, and it is expected that in 2020, the Chinese market sales will account for more than half of the global truck sales.  Moreover, Bernd Heid, a partner at McKinsey, the consulting firm, expects annual truck sales in China to reach 1.5 million units this year, up 200,000 units from last year, despite the impact of the COVID-19 pandemic.

Is localization driven by the market?

The German newspaper Handelsblatt reported that Daimler had disclosed its plan to produce Mercedes-benz heavy trucks in China as early as 2016, but may have stalled due to personnel changes and other reasons.  On November 4 this year, Foton Motor announced that Beiqi Foton would transfer the huairou heavy machinery factory property and equipment and other related assets to Foton Daimler at a price of 1.097 billion yuan.

It is understood that China’s heavy truck is mainly used in the field of logistics transportation and engineering construction.  Thanks to the rapid development of express delivery industry, China’s logistics heavy trucks and logistics transportation demand increased in 2019, with its market share as high as 72%.

China’s heavy truck production reached 1.193 million units in 2019, up 7.2 percent year on year, according to the China Association of Automobile Manufacturers.  In addition, the heavy truck market sales in China continue to maintain the trend of growth due to the influence of strict control, the elimination of old cars, the growth of infrastructure investment and the upgrading of VI and other factors.

It is worth noting that Foton Motor, as the head of China’s commercial vehicle enterprises, its revenue and profit growth mainly benefited from the growth of commercial vehicle sales.  According to the financial data of Foton Motor in the first half of 2020, the operating revenue of Foton Motor reached 27.215 billion yuan, and the net profit attributable to the shareholders of the listed company was 179 million yuan.  Among them, 320,000 vehicles were sold, occupying 13.3% of the market share compared with commercial vehicles.  According to the latest data, Foton motor sold 62,195 vehicles of various models in November, with a 78.22% increase in the heavy goods vehicle market.