Since the 21st century, China's truck industry has been a blowout development, especially in recent years with the structural excess of automobile production, the situation of oversupply has gradually attracted the attention of the government and enterprises. Expand overseas market, participate in international competition, also gradually get attention from many Chinese brands. Africa's infrastructure is relatively weak. With the proposal of China's 'Silk Road Economic Belt and the 21st-Century Maritime Silk Road' strategy, Chinese truck companies represented by Sinotruck and Dongfeng have been speeding up the pace of development in the African market.

Due to the Belt And Road strategy driven by China (terminating in East African countries), the weak railway infrastructure in Africa, and the increased investment in infrastructure and mineral product development by many African countries, the truck market in Africa is gradually becoming favored by Chinese brands.

tractor head

China's infrastructure investments across the vast continent have focused on transport infrastructure, including railways, roads, airports and ports. In addition, China's development finance institutions have also invested in mining and production platforms, such as commodity processing and production facilities, in African countries. Amity between China and Africa has smoothed the way for Chinese truck exports.

I. Current situation of China's truck export to Africa

1. Main selling models in the African truck market are as follows

Due to the large-scale infrastructure construction and weak railway transportation in Africa, the demand for dump trucks and HOWO tractor heads is relatively high. In 2014, the proportion of dump trucks and tractors was 40% and 32%, while in 2015, it was 41% and 37%. Although the total export volume declined in 2015, the total proportion of dump trucks and tractors reached 78%, with a year-on-year growth of 7%.

2. Chinese truck brands exporting to Africa

Sinotruk, Dongfeng, Foton, FAW, Shaanxi Auto, Ben Ben, Valin, Jianghuai and other mainstream heavy trucks in the full use of resource advantages to expand the overseas truck foreign trade market. Sinotruk's truck exports have long been involved in the African market, selling more than 1,000 heavy trucks a year in the vast French-speaking continent. FAW is also one of the earliest automobile companies to enter Africa. It has established a service network for truck export in 17 African countries. In 2011, Foton Motor East Africa completed vehicle assembly production base also held a ground-breaking ceremony in Nairobi, Kenya. Six years ago, Vanguard Group and Dongfeng Motor also started exporting trucks very early and established Dongfeng Africa Co., Ltd. Africa is also the traditional market of Shaanxi Auto's truck trade, and the truck trade is mainly concentrated in North Africa.

SINOTRUK dump truck

II. Problems encountered by Chinese truck brands in the African market

Although Chinese truck brands have achieved certain sales volume and market share in Africa, we should objectively see the problems arising from it.

1. Emphasize that sales and after-sales service are not in place

Due to the distance between Africa and China, the local investment cycle is long, the lack of infrastructure and other reasons, most of the Chinese trucks sold in Africa take the form of after-sales buyout, that is, with the car spare parts are given away, the manufacturer is not responsible for the follow-up service and spare parts support. Although the sales volume in Africa is large, the service capacity is far from being able to afford the repair and maintenance of the vehicles sold. The imbalance between sales scale and service capacity leads to more complaints from African end users about Chinese truck brands, which affects the reputation and brand satisfaction of Chinese brands among African customers. 

2. Disorderly competition

Due to the lack of differentiated products, effective marketing model, incomplete after-sales system and other factors, Chinese brand trucks often compete with Chinese brands in the competition, and the final competition is to fight price. China's truck products lack differentiated design and planning, and most of the manufacturers' models and general vehicles have a high similarity, which leads to the close price level. Chinese brand trucks generally have weak profitability, and manufacturers and local dealers are unwilling to invest in local service and parts system construction. This vicious circle restricts the further development of Chinese brands in the African market and leads to disorderly competition between them.

3. The export mode is relatively simple

At present, Chinese truck brands export to Africa mainly in the form of finished vehicle (CBU), but less in the form of piecewash (KD). However, in order to develop the local automobile industry and promote employment, some African countries restrict the import of automobiles by raising the import tariff of automobiles and implementing quota system. Considering the high risk, large investment and long return period of investment in Africa, most Chinese brands still adopt the model of vehicle export at present. As a result, in markets such as Egypt and South Africa, Chinese truck brands are less competitive on price and have smaller volumes.

III. Development trend

Through the above analysis, it can be seen that only by understanding the current situation and problems of Chinese truck brands in the African market and grasping the future market development trend, can we find a sustainable way to develop the overseas market.

1. Diversification of export modes

The single vehicle export model has been unable to meet the requirements of regulations and customers in different African countries. Therefore, according to the actual situation of different countries, adopt vehicle, CKD, SKD and other diversified export mode, on the one hand, can improve the acceptance of our products in various countries. On the other hand, tariff costs and regulatory thresholds can be reduced to expand market sales and share. For example, in Algeria, the import of CKD can not be restricted by the country's vehicle import quota system, so as to expand the market share. In Nigeria, SKD import method can reduce the import tariff from 35% of the whole vehicle to zero tariff and reduce the tariff cost.

2. Transforming from trade to overseas marketing

Trade type and overseas marketing type, the differences between the two mainly include the following points:

(1) Overseas marketing focuses on all aspects of pre-sale, sale and after-sale, while trade only focuses on sale.

Truck is the means of production, configuration, fuel consumption, attendance, price can meet customer requirements, is an important factor to measure the truck brand. In the traditional way of trade, manufacturers only sell products according to the needs of customers. However, because most customers do not have systematic automobile knowledge, they do not pay systematic attention to the road conditions, configuration requirements and transportation characteristics of trucks, so the configuration requirements proposed by them are often one-sided.

dump mineral truck

Overseas marketing focuses on pre-sale market research, including working conditions, type of goods, terrain, configuration of competing products, etc. In the process of sale, including configuration, price, export method, shipping and other contents confirmation. After-sales, including parts and services, customers, dealers, manufacturers feedback mechanism, etc. Understand the market and customers in pre-sale, in-sale and after-sale, so as to provide customers with a series of transportation solutions. Overseas marketing type provides customers with not only products, but a complete set of logistics solutions, which matches the characteristics of trucks as production materials.

(2) Overseas marketing focuses on what products the market needs, while international trade focuses on what products it has.

In overseas marketing, manufacturers fully understand customers and market demands through pre-sales market survey, customer negotiation during sales and after-sales communication with end customers. They give full consideration to customers in product research and development, production, packaging and transportation, so as to provide customers with products that meet their needs.International trade, on the other hand, ADAPTS products based on what they have and based on information provided by trading partners. In Algeria tractor market, for example, to carry out overseas marketing model, will be combined with local road narrower, customers to drive fast, new regulations demand for speed limiter and kd project demand, etc., design a short wheelbase, small turning radius, high-horsepower engines with small ratio of driving axle, high pressure common rail engine speed limiter products, and actively prepare kd cooperation programs; And only operating in the form of international trade manufacturers, will take the domestic four products to cancel the urea tank, do not change the engine and wheelbase of a single vehicle export mode. The difference of the two overseas market development modes will inevitably lead to the difference of end-customers' reputation for the products, thus affecting the development trend of the two in the domestic market.

HOWO tractor

According to the analysis of Sino-African Trade Research Center, China's truck export has remained stable in recent years, and the volume of truck foreign trade has also created a new height. In 2015, the vast African continent attracted 50% share of China's truck export, and China's truck export to Africa helped Africa become the largest truck foreign trade market of China. In the future, China's truck trade will develop a more national market. With the technological improvement and product upgrading of China's truck products, as well as the rapid transformation of modern logistics industry, it is an inevitable trend for truck exports to go high-end. At the same time, Chinese brands should make intensive efforts in this market, adopt diversified overseas marketing models, design products in accordance with local laws and market demands according to different markets, pay attention to pre-sale, sale and after-sale links, and upgrade the brand image of Chinese trucks from Made in China to Made in China in the minds of African customers.