Following their successful entry into the European market with electric automobiles, Chinese manufacturers, including BYD Co., are anticipated to expand their market reach to include big rigs.
As reported by Fortune, one of the leading truck manufacturers in Europe issued a warning, stating that due to their superior battery and software knowledge.
The 25 Chinese truck and bus companies that are establishing a foothold in the market should be treated with the same seriousness as Tesla Inc.
According to Christian Levin, president of Volkswagen AG’s Scania and Traton, Chinese e-bus manufacturers “managed to establish themselves in a fairly short time, largely thanks to their access to very good battery technology.”
“If you extrapolate and look at trucks, you can imagine a similar development.
Even though Scania, Volvo, and Daimler Truck are attempting to reduce transportation emissions, their sales of electric trucks are still not very strong.
BYD is using some of the expertise and scale it has amassed from its quickly growing passenger-car industry to battery-powered trucks.
Having sold e-buses in countries like Germany, the manufacturer of the 8TT heavy-duty rig intends to establish an EV factory in Hungary. Other growing Chinese businesses in Europe are JAC Motors, Yutong, and Sany.
While Scania is establishing its facility in China to capitalize on growth in the largest truck market in the world, Levin expects more intense competition domestically.
Its new plant in Jiangsu province’s Rugao will open for business in late 2025. It is licensed to make up to 50,000 cars a year, almost half of the Swedish brand’s production.
The models that Scania will produce there are still up in the air.
With double-digit margins and the majority of its deliveries in Europe, Scania is a premium brand.
According to Levin, opening a location in China will reduce production costs and address a capacity issue that costs the company business in Asia because of lengthy delivery times.
According to the CEO, Scania will also benefit from the move by having access to China’s technological know-how, which it may use to hire competent staff or acquire software businesses specializing in speech recognition or human-machine interfaces.
Additionally, the region serves as a fantastic launchpad for sales throughout Asia.
“China is where the sub-suppliers are, where the home market is, and with fine trade agreements with most of the surrounding countries,” said Levin.
“It is easy to export out of China.”
In China, Scania is making up ground. Since 2022, Daimler Truck has been producing Mercedes-Benz rigs in the nation in collaboration with local partner Foton Motor.
Despite abandoning ambitions to purchase Chinese truckmaker JMC Heavy Duty Vehicle late last year, Volvo is still active in the Chinese market, producing buses, engines, and construction equipment.
It maintains joint ventures with local truckmaker Dongfeng Trucks and construction equipment manufacturer SDLG.
Scania, a Swedish company, will have complete control over its manufacturing procedures and intellectual property since it will manage its factory independently of a Chinese partner.
“In the current economic and political environment, companies that are initiating industrial operations in China are taking bold steps,” said Roman Mathyssek, a partner at strategy consultancy Monitor Deloitte.
“For those that missed M&A opportunities in the region, participating in the Asia growth story with market entries out of their brand portfolio is a good strategic solution.
