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Shandong Automotive Industry: Breakdown in Market Segments

January 08, 2023

The automobile is a traditional industry in Shandong. There are more than 1,300 auto industry enterprises above the scale in the province. In recent years, the production and sales volumes in the domestic automotive market have continued to decline. Shandong began to adjust from the supply side, subdivided the market, and developed high-end products to achieve a breakthrough.

Shandong is one of the provinces with the most complete categories of automobile industry in the country. Commercial vehicles, especially heavy-duty trucks, rank first in the country in terms of scale and technology, and the output of light-duty trucks ranks first in the country for more than 10 consecutive years. Although Shandong's auto industry has a leading production capacity and business income in the country, there are few high-end brands, many low-end products, and low industrial profits. There is huge room for transformation and upgrading.

From the beginning of the year, the special oil tractors and semi-trailers developed by China National Heavy Duty Truck Taian Wuyue Company entered the Middle East market. 85 cars, worth more than 11 million U.S. dollars. Wuyue Company has given this new car a very unique name - "Desert Fox". This is the first oilfield special vehicle exported by China. In celebrating the country’s first single, the shadow of dreary survival that began a few years ago began to disperse in the hearts of the employees of Wuyue Company.


Chairman of China National Heavy Duty Truck Group Ma Chunji: "Our company's market began to decline after 2010, and the whole industry of heavy trucks is very difficult. The only thing that comes to mind is how to improve the core competitiveness and achieve the optimization and upgrading of products."

The heavy truck industry has excess capacity, and low-end products cannot be sold even if they fight prices. At the beginning of last year, Shandong introduced the transformation and upgrading plan for the automotive industry, and used the government's strength and market hand to promote the transformation of the automotive industry to high-end. CNHTC Wuyue Company also began to look for business opportunities in subdivided professional markets.

"Mill Lijun, deputy general manager of China National Heavy Duty Truck Tai'an Wuyue Special Vehicles Co., Ltd.:" All personalized products are completely derived from the capture of market demand information. We have research personnel in more than 10 countries and we can adjust the product supply at any time according to the market demand. The program."

While looking for market segments, Wuyue Company also turned its technological power to high-end product development. The oil field special vehicle market in the Middle East has always been the site of European and American auto companies. The temperature difference between day and night is nearly 70 degrees, and the engine of a tractor can not be shut down for 24 hours. The greatest difficulty that Wuyue Company has to solve is high temperature.

Ye Hongxia, head of research and development of Desert Fox, said: “Especially for the heat dissipation of the steering system, we have performed dozens of calculations on the pump's displacement and pipe diameter selection, and conducted simulation experiments. Finally, the hydraulic system finally reached The heat balance condition meets the 60 degree high temperature condition."

The high yields from high-end products and market segments have enabled Wuyue Company to quickly reverse losses for 16 consecutive years. In 2015, the sales volume of domestic heavy trucks fell more than 25%, and the profits of Wuyue Company increased by 2 times year-on-year. many.

Li Lixian, general manager of China National Heavy Duty Truck Tai'an Wuyue Special Purpose Vehicle: "The goal of supply-side structural reforms is, I think, to satisfy the demand side, that is, the user's requirements for products. The structural adjustment direction and supply-side structural reforms should be indiscriminate. And it's all together."

When China National Heavy Duty Truck Tai'an Wuyue Company advanced to the high end, the pace of transformation and upgrading of the Shandong automobile industry was also accelerating.

Li Yukui, secretary general of the Shandong Machinery Industry Science and Technology Association, said: “The fundamental path is to insist on supply-side structural reforms, form a batch of high-end products with independent intellectual property rights to meet market demands, and comprehensively improve the overall competitiveness of the Shandong automobile industry.”

Driven by policies and market hands, Shandong Automobile Industry's main business revenue exceeded 660 billion yuan last year, an increase of 16.7% over 2013, and jumped to second place in the country. The province's new energy vehicles and small electric vehicles are booming in both production and sales and have become new economic growth points. The proportion of high-end, light-weight, dedicated, and intelligent vehicles continues to increase, and the comprehensive supporting capacity of auto parts in the province has been significantly enhanced.

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Author:

Mr. Liu Keda

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syzdhx@163.com

Phone/WhatsApp:

+8613904003748

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Author:

Mr. Liu Keda

이메일:

syzdhx@163.com

Phone/WhatsApp:

+8613904003748

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