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ENTER THE STEEL DRAGON
Page 68
Page 69
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CIMC has thrown down the gauntlet to the world's trailer manufacturers: by 2008 it plans to be the biggest on earth. But who on earth is CIMC? Brian Weatherley looks east.
If you've never heard of China International Marine Containers don't feel too bad. Until a month ago (and a fortuitous article in a supplier's magazine) we hadn't either. But ask trailer component suppliers and their reaction to the Chinese powerhouse verges on hushed reverence.
In the latest edition of Haldex DynamiX, CIMC president Mai Boliang simply says: "Our goal is to become the world's largest trailer manufacturer by 2008'. And according to one major axle manufacturer: They're probably already there."
Last year CIMC built no less than 40,000 trailers at its six domestic production plants in Southern China, including dry freight vans, curtainsiders, reefers, skeletals and tankers. Not bad for starters, even if that's not quite enough to put CIMC in pole position.The current title holder is reckoned to be US giant Great Dane, with an estimated annual production of around 55.000 units, followed closely by fellow American manufacturer Wabash, with close to 48,000.
However, Great Dane and Wabash have good reason to worry about CIMC, especially when it comes to competing in their own (US) back yaniTwo years ago the Chinese company paid some $4.5m (E2.4m) for the trailer-manufacturing assets of Indiana-based HPA Monon. And having refurbished its site, last year CIMC launched an assembly subsidiary cal led Vanguard National Trailer Corporation. One of Great Dane's 10 US manufacturing sites also happens to be located in Indiana —coincidence or what?
Vanguard is already talking about expanding its dry-freight 'van' trailer build from last year's 3,000 units to 8,000 by the end of 2005. As part of that process it recently launched a brace of dry-freight models, and while most components for its chassis-less models are sourced within the US, some 10% of sub-assemblies are shipped in from China.
In parallel with Vanguard, CIMC also brings in fully built up skeletals from China, and there's talk of offering a full product line-up in the US including reefers.
Brake standards cimC trailers supplied to the Chinese and North American markets are currently equipped with Meritor/ROR drum-braked axles. But trailers being developed for the Chinese market will be fitted with Haldex ABS systems as standard.
Among the trailer component providers, ArvinMeritor is actively backing CIMC to hit its target of world leadership by 2008, saying it is "pleased to support their ambitious goal with our trailer products".
It adds:-With products ranging from axles, air suspensions and tyre inflation systems to a complete line of foundation brake and ABS systems,wheel-ends and hubs and drums, ArvinMeritor is the only company with a major global presence in trailer component production." The fact that CIMC uses Arvin Mentor running gear would seem to support that claim.
The reaction from rival U.S trailer makers to the Chinese-backed newcomer is fairly predictable. Rich Dessimoz, Vanguard National Trailer Corporation's president, reckons: "They'll fight us every step of the way,just like they always do, But right now the market is looking pretty good and growing and we're looking for market share from that growth." Within Vanguard's own dry-freight sector Dessimoz is predicting a total market of 175,000 units in 2005 (up from 160,000 in 2004) which would appear to underpin his growth strategy.And 8,000 trailers a year is enough to put Vanguard in the US top 10.
European prospects A production run of 8,000 trailers a year would certainly make CIMC a significant player over here, but it might well find Europe a far tougher nut to crack.The top European trailer maker by a clear head is Schmitz. Last year it built some 36,000 trailers, generating a turnover of €1.18bn (£.785m). But by 2009/10 Schmitz aims to be building 65,000 trailers a year boosting its turnover to more than €2bn (E1.33bn) with, in time, a "technical production capacity in excess of 80,000 trailers".
Of course there's nothing to stop CIMC from buying an under-performing European trailer maker (there are enough around) and doing a Vanguard on it. Alternatively, it could ship in cheap chassis for local assembly which is somewhat ironic, considering how European trailer makers have been grumbling lately about the effect of the exploding Chinese economy on steel availability and prices.
Anyone who doubts of CIMC's ability to conquer western markets might like to consider this: since being founded in 1980 as one of the first container manufacturers and joint ventures in China, it has grown to become the world's leading container maker in terms of output and sales, taking over 40% of the intcrnational container business and more than 50% of the reefer container market. Anyone for a Chinese trailer? •