The Nanjing Iveco Leap Europe Card Series was released in Shanghai. In addition to responding to the fiercely competitive domestic market, Oka will also enter the more lucrative overseas market. “Oka has already obtained European ECE certification and Iveco will use more than 1,000 outlets worldwide for me,†said Zhou Liang, general manager of Nanjing Iveco.
In the commercial vehicle strategic plan of SAIC Motor, Nanjing Iveco will mainly assume the responsibility of light commercial vehicles. Gui Longming, deputy general manager of SAIC's commercial vehicle division, told China Business News that Nanjing Iveco light truck is not only a supplement to SAIC's commercial vehicle business, but also an important support for SAIC's overseas strategy. SAIC will strengthen its investment in Nanjing Fiat's products and networks.
In recent years, the domestic light truck market continues to grow and the market prospects are promising. In 2007, the total sales volume of light trucks in the broad sense exceeded 900,000 units. In 2008, annual sales of light trucks are expected to exceed 1 million vehicles. However, it is worth noting that although the light trucks have large sales volume, their margins are low and their contribution rate to enterprises is low.
From 2003 to 2006, the annual report of light truck companies shows that in these years, the industry's gross margin for light trucks was 5.1% to 6%. In 2007, raw materials such as steel products rose. The gross profit margin decreased by another 1 percentage point, while the foreign level was 15% to 20%. In the first half of 2008, Tong Dongcheng, general manager of Dongfeng Commercial Vehicles, said at a conference of Dongfeng Motor Group: “In terms of unit price per kilogram, heavy trucks are cheaper than pork.â€
In July, several domestic large-scale light truck companies set off a wave of price cuts. Some models have cut their prices by 8,000 to 10,000 yuan, and the price cuts have accounted for 10% of the unit price.
According to statistics from the China Automobile Association, there are more than 40 companies that produce light trucks in China, with thousands of products. In the fierce competition, the survival space of small companies has been repeatedly squeezed, and some companies have annual production and sales of even under 1,000 vehicles. Experts in the industry analyzed that because Chinese companies weigh figures and restate reports, they will not abandon the business segment of light trucks, which has a low profit but an astonishing amount.
Gui Longming said in an interview with the reporter of the "First Financial Daily": "Low-end light trucks have a low contribution rate. We must pay attention to the medium-end light truck market that can ensure sales and ensure profits. Foreign markets have higher profits. The work to enter the domestic and overseas light truck market will start simultaneously."
View related topics: SAIC commercial vehicle expansion
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