According to an external report, Leif Oestling, executive director of Volkswagen Group's commercial vehicle business, said recently that it will enhance the performance of its commercial vehicles, Scania and Man brand in emerging markets such as China and Brazil. The business is downtrend and considers establishing a truck joint venture in China to boost business growth in China.
VW's Commercial Vehicle Business Frustrated
On September 15, the Frankfurter Allgemeine Zeitung interviewed Liv Ostrin, who stated that the current global economic downturn has ranged from Europe, which occupies nearly half of VW's commercial vehicles, to new ones such as China and Latin America. In the market, the commercial vehicle business is experiencing downward pressure.
Osterlin said: “The European market is not the only market in which VW’s commercial vehicle business is in a difficult position. Similarly, Brazil’s demand is declining. In the Chinese market, we expect it will drop sharply compared to last year and sales will decrease approximately year-on-year. About a quarter.†Therefore, Volkswagen’s commercial vehicle brands have no intention of reducing production hours.
Osterlin said that the goal of Volkswagen's commercial vehicle business is to increase by about 4-5% year-on-year, depending on the specific economic circumstances.
Liv Ostrin, who previously served as Scania's CEO, replaced Jochem Heizmann as executive director of the Group's truck business since September 1st this year. And Heitzman went to Volkswagen China as CEO to replace Ni Kaiming.
Volkswagen considers establishing a truck joint venture in China
However, Austerling stressed that the commercial vehicle business of the masses still hopes to continue to expand in markets such as China, India and Russia. In the 4-5% sales growth year-on-year, most of the increase will come from emerging markets such as China and India.
The "Frankfurter Messe" asked whether Osterlin would enter the Chinese market through mergers and acquisitions. He replied that both ways of increasing imports and establishing joint ventures can effectively accelerate the expansion of the commercial vehicle business in China.
Osterlin said that in terms of heavy trucks, there are two options to boost business growth in China, both to increase direct imports from Europe and to establish joint ventures in China. Man Trucks has established a joint venture with China National Heavy Duty Truck Group in 2009 to produce cheap trucks. In fact, it is not necessary to put production in China. Currently, the tariff rate for trucks produced by Mann and Scania in Europe to enter the Chinese market is only 6%.
In addition, Volkswagen Commercial Vehicles also believes there is tremendous growth potential in the Southeast Asian market. For example, the new Amarok trucks can be released to increase local sales. However, for the North American market, Volkswagen has no intention of acquiring the rival Navistar. Volkswagen plans to exceed Daimler as the world’s largest commercial vehicle company by improving its performance in emerging markets.
Osterlin also pointed out that the emerging commercial vehicle market is mainly concentrated in the simple and cheap truck sector, but it has begun to change. Consumers realize that advanced technologies can save a lot of fuel and maintenance costs for them. In terms of overall economic output, China's logistics expenditure consumes 18% of the total, while Europe only has 7%. China's transportation system also needs to further improve efficiency. With the progress of urbanization, China will have 60% of its population living in cities in the future. Therefore, China needs to build a strong logistics system. This is a huge opportunity for commercial commercial vehicles.
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