Although the domestic car still maintains a certain growth, the financial crisis has already taken the lead in China’s commercial vehicles. From June to October, China’s commercial vehicles have been tumbled in April. The world’s largest commercial vehicle company Volvo Group’s joint venture company in China Huawo Truck Co., Ltd. (hereinafter referred to as “Hua Woâ€), after two years of production stoppage, has recently revealed that Volvo Group executives have said that the Huawo truck project has been restarted.
"Huavo restart? No," said China National Heavy Duty Truck executives. “Recently all the information on the restart of the Huawo project is apocryphal.†On November 29, the Volvo Group (China) told reporters. In fact, Huawo, which has stopped production for more than two years, has already reached a dead end.
Discontinued 2 years
"Hua Wo? Is there anyone else? That's nobody!" On the hillside under Huawo, an old worker at China National Heavy Duty Trucks and Bridges Company said loudly.
Last week, after the industry reported that Huawo Truck was about to restart, the reporter went to the Huawo site that had been discontinued for more than two years. Unlike the busy scene of other companies in the Heavy Industry Park, Huawo appeared to be almost “desolateâ€. In the quiet, Huawo, which had stopped production for two years, has no production workers to work.
A chain wrapped in plastic hides the main entrance of Huawo. Looking from outside the door, the workshop door is tight and the factory area is empty. There are no components and transport vehicles related to Huawo. In the fall season when the leaves fell, Huawo had a clear difference from other companies in the Heavy Industry Park: There were no leaves on the ground, and there were few people. The workshop did not hear the roar of the machine.
The alliance between China National Heavy Duty Truck and VOLVO is the first joint venture company for heavy trucks in China. After 9 years of lengthy negotiations, the joint venture company Huawo commenced production in 2004. This alliance was once considered a model for joint ventures.
Huawo is located in the corner of Jinan Industrial Park, which is located in Liulin Village, Dangjiazhuang, a suburb of southwestern Jinan. Liu Lin is a hilly village. The bare stone mountain is a natural quarry. Traces of artificial destruction of the mountain can be seen everywhere. Huawo is located on a small hill in the Heavy Industry Park, adjacent to the heavy truck Jinan Bridge Box Company and the HOWO plant.
But in a short period of time, this "marriage" has become a special history in the history of China's commercial vehicle joint ventures. In the year of production, October began to break out of production. After producing only 200 cars in 2005, it was completely shut down in early 2006.
"Only the leaders come to work every day, and there is no one worker," said Huawo's security guard. On November 25th and 26th, the reporter repeatedly called Huawo Human Resources, Finance and other departments. No one answered the call. On November 26th, a person in charge of CNHTC again confirmed to reporters the news of Huawan's suspension of production. "Hua Wo has been discontinued for 2 years," he said exactly.
According to statistics, Huawo was jointly built by Volvo Trucks and CNHTC Group with a total investment of RMB 1.6 billion. The negotiations lasted for 9 years and began production in 2004. According to the plan of the joint venture parties, Huawo's models include the Volvo FL6, FM9 and FM12. It plans to produce 2,500 Volvo trucks in 2005 and 10,000 in 2008.
According to the information already published and the statements made by the responsible persons of the two parties, Huawo only produced more than 200 vehicles in 2005. In October 2004, there was a full shutdown. The head of CNHTC said that the sales price of Huawa's trucks is 2 to 3 times higher than that of domestic heavy trucks of the same level, which is very difficult to accept for domestic consumers. The sales of Huawo trucks are sluggish and they have to stop production.
Brothers Wall
The disparate Sinotruk and the VOLVO Group each issued various allegations that they were not. VOLVO alleged that Sinotruck rebelled against faith and confiscates technology after it was misappropriated; China National Heavy Duty Truck Group alleged that VOLVO was falsified by localization, and was keen on CKD and implemented a technology blockade.
On November 29, the Volvo Group (China) said that "in the near future all information on the restart of Huawo Project is apocryphal." The company has not released any information related to Huawo.
"The group's tone is not to talk about Huawo. The first is because Huawo has little business relationship with CNHTC, and the relationship between the two is not big. Second, after the sale of power to Volvo (China), the dominant power is in Volvo. It is not heavy truck," said the person in charge of heavy trucks.
After Volvo sold its sales rights to Volvo (China), CNHTC became an "outsider" in the joint venture. Most of the components of Huawo Trucks are imported from “land, sea and airâ€. Jinan Huawo Truck Company is actually just an assembly line. During this process, heavy-duty trucks have hardly participated in the process.
The attitude of both parties suggests that the prospects for the cooperation between Sinotruk and Volvo are bleak. Previously, Wu Yuzhang, the former president of Volvo Truck China, once told the media that Volvo has "drained and diverted water into other people's channels." The HOWO brand of the Weighing Group used its Volvo brand and technology to develop and was unfavorable to the joint venture company. What makes Volvo particularly dissatisfied is that the history of HOWO has actually started with a set of head moulds from Volvo. This is equivalent to Volvo's role in promoting Sino Heavy Gas from a partner to an "adversary."
The joint venture has made Huawo more passive. Huawo Truck's self-owned heavy truck HOWO has developed rapidly in the face of low sales in China. According to statistical data, HOWO heavy truck production and sales exceeded 10,000 units in the year, and more than 4,000 vehicles were exported overseas. At present, China National Heavy Duty Truck Group holds the first place in domestic sales of heavy-duty vehicles with the highest sales volume, high-power 300-horsepower high-power engines, and more than 10-liter engines. Hard commercial vehicle joint venture
Huawo Truck stopped production for many years, Volvo and FAW, heavy truck joint venture engine projects and the cancellation of the joint venture of Guangzhou Automobile and modern commercial vehicles, Dongfeng VOLVO is on the verge of suspension, Mercedes-Benz and Foton Motor joint venture process dragged down nearly 5 years, plus Yaxing Mercedes, Hongyan Iveco Other joint venture commercial vehicles lost the city. Although China is a hotbed of joint ventures for passenger vehicles, it seems to be a joint venture of commercial vehicles.
“Cultural integration is a problem. For example, Yaxing Mercedes-Benz, the joint venture has a great deal of conflict,†Jia Xinguang, a domestic automotive expert, said. In addition, as a means of production, domestic consumers tend to be cheap domestic commercial vehicles, and Renault, Mercedes-Benz and VOLVO trucks, etc. because of the price is too high to keep many consumers out of the door.
In the case of Huawo Trucks, Volvo Trucks has always been known for its high performance and stability. However, because of China's policy on truck load restrictions, the advantages of Volvo Trucks cannot be reflected. The high-priced Waldorf trucks are in this competition. There is no advantage. At the same time, Chinese customers are different from buyers of commercial vehicles in Europe, and their pursuit of output ratio is particularly strong. Basically, new commercial vehicle purchases are centered on corresponding projects. In this case, local trucks with performance that is inferior to Huawo trucks but are cheaper and have equivalent performance are used as substitutes.
The data shows that in 2007 and 2008, the heavy truck market maintained a strong development trend. In 2007, the cumulative number of heavy-duty trucks was 489,900, an increase of 61.36% year-on-year; sales were 487,500 units, an increase of 58.64% year-on-year. In the first half of this year, sales of heavy trucks increased by 48.6% in the same period of 2007, and began to fall back in August, but began to rebound at the beginning of the fourth quarter. Under the background of increasing infrastructure construction throughout the country, it is expected that the heavy truck market will continue to develop rapidly next year.
However, it is hard to say whether joint venture heavy trucks can seize the opportunity. Although China's heavy trucks are relatively weak, commercial vehicles are the originator of China's auto industry. Through the study of joint ventures, China’s domestic heavy truck team is unprecedentedly strong. Including CNHTC, Shaanxi Auto, Beiqi Foton, Dongfeng, and FAW Trucks have been actively exploring overseas operations. China National Heavy Duty Truck Group and Shaanxi Heavy Duty Truck Group share nearly 60% of the heavy-duty trucks with a load of over 15 tons.
“The national policy has started to tighten joint ventures, turning to support self-owned brands, and the risk of joint ventures has increased. For foreign heavy trucks, technical cooperation will be a more relaxed and profitable approach,†Jia Xinguang said.
View related topics: China National Heavy Duty Truck Breaks Monthly Sales Record for National Heavy Truck Industry
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