Recall the top three light trucks. This is the short-term goal of Dongfeng Motor.
In the past 2014, Dongfeng lost its market position of “the top three light trucks†for many years. Entering the light truck market in 2015, the downward trend is still difficult to stop. China Automobile Association data show that in January the domestic light truck industry sold a total of 133,100 units, down 12% year-on-year, most companies including Futian, Jianghuai, Dongfeng, etc. are still in decline channel, the market "star" only Jiangling, Qing Bell and other minority companies in the Isuzu technology system.
In 2015, what measures will Dongfeng Light Trucks take to reverse the decline and regain lost ground? The first commercial vehicle network analyzed Dongfeng Motor and concluded that there was an opportunity for Dongfeng Light Trucks to return to the top three markets in 2015-2016, but the challenges were also enormous.
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Dongfeng State IV Light Truck Series
In 2015, it will continue to decline by about 13%
The decline of the Dongfeng light trucks is closely related to the decline of the entire industry, and the continued decline of the light truck industry is undoubtedly directly related to the upgrading of the emission policy last year. In May 2014, CCTV continued to report the phenomenon that four truck brands in the truck industry were popular. After that, major ministries and local governments strictly followed the implementation of the National IV. The phenomenon of the national and national emissions of light trucks and decks in the country was gradually eliminated. As a direct result, the price of economical and mid-range light trucks has generally risen by 20,000-30,000 yuan, while the price of high-end light trucks has risen by only a few thousand yuan. Users are waiting to see a serious situation, and the entire market is in great turmoil.
“In May 2014, CCTV reported that the light truck industry fell rapidly after the fake four-car deck. We believe that the entire light truck market will experience a 13% to 14% decline in 2015, but the market size of mid- to high-end models will further increase. With the expansion, the scale of economical light trucks will continue to shrink, said He Weiping, marketing director of Dongfeng Light Commercial Vehicle Marketing Company. According to statistics, the total sales of the young card industry in 2014 reached 1.66 million units, a year-on-year drop of 13%. Even if the pickup truck and light dump truck were excluded, the decrease in the total volume of pure light trucks also exceeded 13%; the low-end light trucks have become the hardest hit area. Only Jiangling, Qingling, Jianghuai Shuai Ling, and Foton Ouma and other high-end light truck brands increased significantly (JMC's light truck sales exceeded 100,000 vehicles for the first time last year, an increase of 33.3% year-on-year; JAC Shuai Ling’s domestic sales were close to 30,000 vehicles last year. This was a year-on-year increase of 26%; Futian Ouma sold domestic sales of 25,000 vehicles last year, an increase of 37.4% year-on-year.
In response, Yang Qing, general manager of Dongfeng Motor Co., Ltd. analyzed that the proportion of low-end products in the young card market in 2015 will fall from 46% to 38%, and the combined proportion of mid-, mid- and high-end light trucks will be historically significant. It reaches 62%. By 2016, the proportion of low-end light trucks is expected to drop further to around 32%.
Major changes to the business model of light trucks
Changes in the market structure have also brought about great changes in the business model of the light truck industry.
Zhang Xiaofan, assistant general manager of Dongfeng Motor Co., Ltd., and general manager of Dongfeng Light Commercial Vehicles Marketing Co., Ltd. believes that behind the decline in sales volume is a huge change in the business model of the light truck industry and the transportation market. “Not only us, but almost all companies including Futian and Jianghuai, etc. are caught off guard by the switch of the country.†The upgrade of the emission standards directly promoted a major shift in the light-card industry in the “National IV†era. “Even commercial operation modes have emerged. Great changes".
Assistant to General Manager of Dongfeng Motor and Zhang Xiaofan, General Manager of Dongfeng Light Commercial Vehicle Marketing Company
First of all, in the past, two-ton models with 480 and 485 power were favored, and light-card customer groups with overloaded features were used. With the increase of emission standards, the strictness of overriding control was tightened, and the price of national diesel vehicles rose sharply. , They tend to purchase petrol micro cards. “Micro-cards will grow very quickly this year, especially for micro-card companies represented by Wuling and Chang’an, which will erode part of the market for light-duty trucks.†Traditional light truck companies have also launched low-tonnage gasoline and dual-fuel countries. Four micro cards to reduce the sensitivity of rural users to prices as much as possible.
Secondly, once the popular three-ton large light trucks were built and developed along with the expressways, individual transporters ran farther and pulled more, and then became more centralised, and some models even expanded to 12 tons. "This again eroded some of the market size of light trucks." In addition, the electric business has developed rapidly in recent years. The European VANs represented by Iveco and Quanshun are gaining momentum rapidly. "A variety of enclosed vans and light passengers have gradually become one of the mainstays of urban express delivery and logistics distribution."
As a result, under the pressure of petrol micro-cards, China Cards, and light passengers, "the demand for the light-duty truck market was mostly pushed onto the '3.3-meter wheelbase model, slightly larger than the 3.8-meter wheelbase. The smaller one is the 2.8-meter wheelbase.In the future, the market size of light trucks may continue to shrink. The 3.3-meter wheelbase and 4.2-meter-long 6-meter limit blue car will be the mainstream light truck products in the future. It is precisely Jiangling’s key product that its oil brakes with a 1.69-meter cab and a 3.3-metre wheelbase are priced at only around RMB 70,000. The cost is the lowest in the industry, and this is the rapid growth of Jiangling after its strict implementation of State IV in 2014. Important reason. Note by the author.)
At the same time, the downstream market for light trucks, the logistics industry, is also rapidly diverging. In addition, the low freight rates, coupled with the increase in the prices of the country’s four vehicles, have led to an increase in the number of self-employed individuals and the acceleration of specialization and intensification of logistics. "The future logistics market will only have two main categories: professional logistics companies and professional drivers. Transporters who are both owners and drivers will gradually disappear. The light card industry's product appeals are mainly concentrated on 'economic, safe, efficient, comfortable, and fast.' These are the aspects that better meet the requirements of the two types of vehicles mentioned above. The “economy†we talked about in the past refers to the one-time purchase cost and the deck is cheaper; the current and future concept of “economy†refers to fuel economy. Because the biggest cost of logistics companies is fuel consumption.†Zhang Xiaofan told reporters.
 
Dongfeng Kaipute N series equipped with Dongfeng D28 diesel engine
Dongfeng Light Truck Business Out of Operational Adjustment Period"A wave of waves has risen again and again," and the new market structure and shocks have added a new obstacle to Dongfeng Light Truck's ongoing business adjustment.
People familiar with Dongfeng Motor know that as early as 2012, Dongfeng Motor has started a "medium-term adjustment plan." The new general manager Yang Qing proposed to use two to three years or so to solve the serious backlog of Dongfeng light trucks at that time. Insufficient competitiveness, continued loss of mini-vehicle business, and decline in the competitiveness of light-duty trucks, and other internal and external problems. The "sudden entry" of the four factors in the country has caused considerable interference, but it has not extended its time frame for adjustment. At the 2015 business conference held at the end of December 2014, Yang Qing announced that Dongfeng Motor officially came out of the adjustment period. By the end of 2014, Dongfeng Light Truck's full-calibre inventory has been reduced by 56%, of which, light truck inventory has decreased by 55% and construction vehicles have been reduced by 84%. "The drastic reduction in inventory has reduced the company's and distributor's capital occupation, and it has also made vehicle inventory more reasonable."
On the other hand, Dongfeng Motor also sold a loss of micro-car business (sold to its fellow brothers Dongfeng Xiaokang), which made it lighter and more focused on light commercial vehicles (LCV) such as light trucks, light passengers, and passenger car chassis; the company also increased With the quality management level, the supplier platform is optimized and the frequency of product quality failures is greatly reduced.
Among them, the most important is that Dongfeng Light Truck's new national product layout has been rebuilt and reorganized, which has laid the foundation for Dongfeng's growth in 2015. The key to the success of Dongfeng to achieve counter-attacks and complete growth and contrarian growth is whether new product lines and new brand strategy implementation can work.
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