In 2010, China’s heavy-duty truck sales exceeded the one million mark, while North America only has a scale of more than 200,000. This disparate market capacity is a temptation for any foreign company to resist. How did PACCAR, the truck manufacturer with DAF, Kenworth, and Peterbilt, develop in the Chinese market? In the development of the Chinese market, the Group visited William R. Kozek, vice president of Pekka Group.

Peca long head truck

Local self-owned heavy trucks make rapid progress

William admitted that China's own independent brand heavy trucks have made rapid progress, which has brought no pressure to foreign commercial vehicle companies. He said that the appearances and interior design of China heavy trucks seen at foreign exhibitions are almost the same as those of European and American brands, but there is only a 2 to 3 year gap in durability.

The gap between Chinese and foreign heavy trucks has gradually narrowed. Does it make it increasingly difficult for European and American high-end heavy trucks to enter China? William said that although China’s heavy truck companies have made rapid progress, they still hope to obtain advanced foreign technologies in the engine, cab and chassis technology platforms. The time window for foreign heavy truck companies to enter the Chinese market will not be closed in 3 to 5 years.

Shanghai Auto Show Duff Truck

Finding Development Strategies for the Chinese Market

William believes that the Chinese market is unique and that many experiences do not apply to China. Therefore, there is no timetable for Pika’s joint venture in China. Now, on the one hand, we must actively seek out partners; on the other hand, we must strive to find a suitable strategy for local development.

William said that he found that many Chinese users are very aware of the cost advantages of high-end heavy trucks during the product life cycle, but due to the high expenses of transportation companies (fuel costs, bridge tolls, insurance fees), especially fuel costs and bridges Toll occupies too high a proportion of the cost. Users must reduce operating costs and can only reduce the cost of car purchases. This is a last resort choice. China's used car market is not perfect, and financial services related to truck sales and services are imperfect, which restricts the development of high-end heavy trucks. This is also a problem that Pecca will face.

William stressed that Pegasus is more flexible than competitors in using high technology. Many of the advanced technologies used by Pika on the heavy trucks are more advanced in the Chinese market. For example, 1.6 million kilometers of engines are needed for the first major overhaul. Unlike European commercial vehicle companies, Pekka regards the technical level of products as inflexible. Pekka can produce high-tech products and can also flexibly change for Chinese users on the premise of ensuring quality. The market's low-cost products. Only this product will not use the DAF brand, but will launch a new brand together with Chinese partners.

Shanghai Auto Show Duff Truck

Large-scale procurement is the focus of Pecca’s current work in China

William did not disclose any timetable for joint ventures in China during the interview. Some of the legendary intentions of cooperation do not mean that the negotiation project has been nailed down. It is possible that nothing will happen at the last minute. Although not yet a joint venture, Pecca's business in China is quite busy. William said that finding suitable suppliers for large-scale procurement in China is the focus of Pecca's current work in China.
According to Song Yang, Purchasing Director of Pekka China, the components purchased by Peca include various products such as engines, transmissions, and interior and exterior trims and fasteners. The annual purchase amount is more than 100 million U.S. dollars, far exceeding the sales revenue in China. It can be said that Pekka currently spends far more in China than it does.

Buying parts from China is a lot for Pecca

First of all, Chinese suppliers are working with Pecca to gain not only orders and profits but Pega's management philosophy, including strict control of product quality, management of operator skills, and higher standards for the production process. In the cooperation process learned a lot of useful things.

More importantly, Peca's procurement of parts from China can reduce production costs and enhance product competitiveness. Secondly, establishing a good relationship with Chinese suppliers can help Pega's future joint venture projects to be rapidly localized. In particular, in the joint development of some parts and components, Pecca has in-depth cooperation with many suppliers. Third, cooperation with Chinese suppliers not only makes Pekka products more competitive, but also brings opportunities for Chinese suppliers.

When talking about whether Pekka will fire other foreign passenger car manufacturers to enter the Chinese market in a joint venture, William said: “Although some multinational companies use joint ventures to produce heavy trucks in China, Pecca does not necessarily follow suit. We have our own advantages. Quality, innovation, and technology are the core concepts of Pecca, creating the best products, providing the best services, and maximizing the value of customers, is the consistent pursuit of Pecca. We have the ability to offer our customers the right price. Provide quality and competitive products. We can respond quickly to meet customer needs," said William.

Extensive reading:
Peca Group was founded in 1905 in Bellevue, Washington, USA. The annual global sales amount is more than US$7 billion and the number of employees is more than 20,000. The total annual output is about 100,000 vehicles. In addition to the United States, the company also has manufacturing facilities in Canada, Mexico, Australia, the United Kingdom, and the Netherlands. Pegas Group 7 and 8 truck brands include Kenworth, Peter Porter, Da Fu, Leland, and Forden. Kenworth and Peterport each have 11% and 10% share of the US heavy-duty truck market. In addition, Pekka Group produces industrial winches at Bellevue, Washington. Pekka Company introduced eight heavy trucks to the world based on the Kenworth, Peterport and Dafu brands, and launched the seven-level medium-duty trucks in North America relying on Peter Porter and Kenworth. In addition, Greatrich produces trucks 5-7 in the Netherlands and Belgium and sells in Europe, the Middle East and Africa. The 4-7-class trucks produced by the Fudan Trucking Company are sold in Europe.

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