• Mon
  • Jul 28, 2014
  • Updated: 10:46pm
BusinessChina Business
TRANSPORT

Chinese commercial vehicle makers target Hong Kong

Transport firms query production quality as importer stresses cheapness

PUBLISHED : Tuesday, 09 July, 2013, 12:00am
UPDATED : Tuesday, 09 July, 2013, 5:20am

Mainland commercial vehicle makers are keen to tap the Hong Kong market as domestic sales decline and fuel economy standards get tougher in their home market.

In recent years, mainland commercial vehicles such as Yutong buses and Changhe trucks have become more widespread in Hong Kong. Buyers have more confidence in these brands, as the vehicles use parts from European manufacturers.

Sime Darby Motor Services, a subsidiary of the Malaysian multinational, announced yesterday that it will be the exclusive distributor in Hong Kong and Macau for commercial vehicles made by Jianghuai Automobile Co (JAC), a company based in Hefei, Anhui province which produces both trucks and passenger cars.

Sime Darby plans to start selling nine-tonne trucks, a market long dominated by Japanese and US brands, in Hong Kong this month.

Kinson Tang, the firm's assistant marketing manager, said: "Trucks produced on the mainland are of good quality, and our retail price will be about 25 per cent lower than those of Japanese brands."

He said each truck would cost not more than HK$300,000.

"Small and medium-sized enterprises are seeking cheaper substitutes, such as second-hand Japanese nine-tonne trucks, so our new product is intended to grab this market segment," Tang said.

Small and medium-sized enterprises are seeking cheaper substitutes, such as second-hand Japanese nine-tonne trucks, so our new product is intended to grab this market segment

On the mainland, sales of domestic brands of commercial vehicles are falling in terms of volume and market share, largely because of slowing economic growth and efforts to curb air pollution by limiting vehicle ownership in cities.

Annual sales of commercial vehicles on the mainland fell to 3.81 million units last year from 4.04 million in 2011, according to Bloomberg.

Chiang Chi-wai, chairman of the Lok Ma Chau China-Hong Kong Freight Association, said the production quality of mainland trucks had yet to catch up with that of their Japanese counterparts. Mainland-produced vehicles make up about 2 per cent of the fleets of the group's members.

"Compared with the Japanese, mainland vehicles have more minor defects," Chiang said. "There should be at least a 30 per cent price difference in order for them to be appealing."

A manager at Cheuk Tak Transportation said commercial vehicles made on the mainland have a shorter life span and lower quality, and she would prefer Korean products at a similar price.

A recent report by Business Monitor International projected growth of 6.1 per cent in commercial vehicle sales in Hong Kong this year to 4,728 units, saying that sales would be boosted by a government subsidy to encourage owners to replace old diesel vehicles.

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