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Profiling China's Heavy Truck Market.

Issued at 2013-07-03



While oversupplied, China's heavy truck market offers attractive opportunities for OEMs willing to meet the evolving needs of their end customers. Winning players are taking fundamental steps to help customers increase their total value of ownership and achieve world-class levels of productivity and cost efficiency.

While boom times have characterized China's passenger car market, the country's heavy truck sector has experienced high levels of overcapacity and intensifying competition. The industry's current capacity utilization ratio is under 50 percent and will likely remain at or below 75 percent through 2020. While the market itself will continue to face too much capacity, a number of new entrants have gained a foothold in China and have begun to capture large shares of the heavy-duty truck market. These players derive much of their success from the savvy targeting of high-potential customer segments with the right products, services, and marketing campaigns.

While the progress of new entrants has been impressive, multinational companies dominate the high end of the heavy truck market, offering world-class product quality, reliability, and durability. And some of these players are planning to enter the low end of the market, reducing vehicle specifications and gradually localizing engine production.  

Fleet customers currently account for most of China's dump truck and mixer sales, and are gaining market share in tractors and cargo trucks from individual owner-operators. Intensifying competition is gradually driving individual owner-operators out of the market (due to lack of scale and sophistication) or compelling them to join fleets.


Source: McKinsey&Company



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