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What’s the Situation of the Trucks in Africa?

Views: 104     Author: Site Editor     Publish Time: 2019-10-08      Origin: Site

The overwhelming advertising campaign, frequent upgrades in warranty time, and lower new car prices indicate that the African auto market is gradually becoming more active. Not only in South Africa, where the economy is most developed, but also in Algeria, Egypt, Morocco, Tunisia and Ethiopia in East Africa, car sales are growing rapidly. Therefore, the development of African truck market is very necessary.

Since the 21st century, China's truck industry has been blowout-like development, especially in recent years, with the structural surplus of automobile production, the situation of oversupply has gradually attracted the attention of the government and enterprises. Developing overseas markets and participating in international competition are also gradually valued by various Chinese truck brands. Infrastructure in Africa is relatively weak. With the introduction of the strategy in China, the Chinese truck enterprises represented by heavy duty trucks and Dongfeng brands have stepped up the pace of African market development.

African Truck Market Trend

The main models of truck market in Africa are as follows:

Due to the large-scale infrastructure construction and weak railway transportation in Africa, the demand for dump trucks and tractors accounted for 40% and 32% in 2014, compared with 41% and 37% in 2015. Although total exports declined in 2015, the proportion of dump trucks and tractors reached 78%, up 7% year-on-year.

Chinese truck brands exported to Africa:

China Heavy Duty Truck, Dongfeng, Futian, FAW, Shaanxi Automobile, Benben, Hualing, Jianghuai and other mainstream heavy trucks are making full use of their resources to expand the overseas truck foreign trade market. China Heavy Truck Group's truck exports have long been related to the African market, with annual sales of more than 1,000 heavy trucks in the vast French-speaking region of the continent. FAW is also one of the earliest automobile companies to enter Africa. It has established a service network for truck export trade in 17 countries in Africa. In 2011, Fukuda Motor East Africa Automobile Assembly and Production Base also held a founding ceremony in Nairobi, Kenya. Six years ago, Vanguard Group and Dongfeng Automobile started truck export very early, and established Dongfeng Africa Co., Ltd. Africa is also the traditional market of truck foreign trade of Shaanxi Auto Company. Truck foreign trade is mainly concentrated in North Africa.


How to Develop African Market?

On the basis of understanding the current situation and problems of Chinese truck brands in the African market, and grasping the trend of future market development, we can find a way of sustainable overseas market development.

1. Diversification of export modes

A single vehicle export model has been unable to meet the needs of different African countries in terms of regulations, customers and so on. Therefore, according to the actual situation of different countries, the adoption of diversified export modes such as whole vehicle, full-Part (ckd), half-part (skd) and so on can improve the acceptance of our products by all countries on the one hand; on the other hand, it can reduce tariff costs, regulatory thresholds, thereby expanding the market sales volume and proportion. For example, in Algeria, the import of CKD can be exempted from the restriction of the country's vehicle import quota system, thereby expanding the market share; in Nigeria, SKD import can reduce import tariffs from 35% of the vehicle to zero tariffs and reduce tariff costs.

2. Transition from Trade-oriented to Overseas Marketing-oriented

The differences between trade and overseas marketing mainly include the following points:

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

These are important factors to measure the truck brand the production data, which included configuration, fuel consumption, attendance rate and price can meet customer requirements. However, because most of the customers do not have systematic knowledge of automobiles, they do not pay systematic attention to the road conditions, configuration requirements and the characteristics of the goods transported. Therefore, their configuration requirements are often one-sided. Overseas marketing focuses on pre-sale market research, including operating conditions, types of goods, terrain, competitive goods allocation, etc. During the sale, including configuration, price, export mode, shipping and other content confirmation; after-sale, including accessories and services, customers, distributors, manufacturers feedback mechanism, etc. Understand the truck market and customers in three aspects: pre-sale, in-sale and after-sale, so as to provide customers with a series of transportation solutions. Overseas marketing provides customers with not only products, but a set of logistics solutions, which matches the characteristics of trucks as means of production.

(2) Overseas marketing pays attention to what products the market needs, while international trade pays attention to the products.

In overseas marketing, the manufacturer fully understands the customer and the market demand from three links: pre-sale market research, in-sale customer negotiation and after-sale communication with the end-user, and fully considers the customer in product development, production, packaging and transportation, so as to provide the products to meet the customer's needs. International trade, on the other hand, is based on what products it has, but only on the information provided by its trading partners. Taking the Algerian tractor market as an example, the overseas marketing mode manufacturers will design short wheelbase (small turning radius), large horsepower engine with small speed ratio rear axle, high pressure common rail engine with speed limiter, and actively prepare for KD combination, taking into account the narrow local road, fast driving speed of customers, the demand of new regulations for speed limiter and the demand of KD project. The plan is made, and the manufacturer which only deals in the form of international trade will adopt the single vehicle export mode of canceling the urea tank and not changing the engine and wheelbase for the four domestic products. The difference of the two modes of overseas market development will inevitably lead to different word-of-mouth of the end-users, which will affect the development trend of the two in the domestic market.

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