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With Ford about to launch the Transit Connect in the
Page 30
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US and DaimlerChrysler involved in a Chinese joint venture, 2007 is shaping up as an eventful year for the global light CV market.
Oliver Dixon reports.
This is the year in which the commercial vehicle business goes horribly wrong. From a peak founded on buying to heat the introduction of Euro-4 and Euro-5 and, in the United States, EPA 07 most pundits are predicting a fall of about 10% in the EU markets, and anything up to 40% in the US. Couple this with a few worrying economic indicators, and the outlook is bleak.
But a smile or two may be raised by the humble panel van.The light CV sector is often the most robust of all vehicle markets. Vans, after all,are the worker bees of the vehicle pare, and people tend to buy them whatever the weather. Contrast this with investment delays affecting heavy trucks, as well as ebbing consumer confidence in passenger cars,and the van looks to be a safe bet for 2007.
And there are some interesting developments in the van business at present. In the past few weeks, German manufacturer Daimler Chrysler has tied down its joint-venture (JV) deal with China Motor Corporation and Taiwanese manufacturer Fujian Motor Group for the annual production of 40,000 M-B-branded light CVs in China.
Right time to spend
If the Chinese statistics are anything to go by and Chinese arithmetic, particularly regarding vehicle sales, can at times be a thing of some wonder then DC is forking out its £135m at just the right time. In the first nine months of 2006, sales of light trucks in China rose 13% to almost 630,000, according to the China Association of Automobile Manufacturers.
China's CV and bus sales hit in the region of three million units last year, a 20% increase on 2005, and KPMG reckons it will continue to grow at a steady 10% a year.
Good news for DC which has also, finally, managed to settle its argument with its insurers over the Chrysler takeover/merger debacle. DC will get €168m (Ell 1m) of the €175rn (f.116m) it was hoping for, and one or two eyebrows have been raised at the Stuttgart negotiators' eagerness to clear this cheque before 31 December.
But this aside, where does the joint venture (JV) leave DC in terms of building heavy trucks in China? Nowhere is our estimate. According to the Chinese government two fully fledged Ns are enough for any company, so the fanfare surrounding the proposed acquisition of 24% of Beiqi Foton looks lobe a bit premature.
DC has an existing bus J V, Yaxing-Benz, with Jiangsu Yaxing Motor Coach Group. Quite how the world's biggest truck manufacturer will feel playing second fiddle to a middle-ranking Chinese manufacturer we don't know, but it should be entertaining.