Sinotruk gears up for overseas markets

At a vast R&D center in eastern China, Sinotruk technicians in bright white uniforms bustled around us testing new, experimental products.

"Look at this," the executive guiding me around the facility says, pointing at a prototype of a new-energy truck engine that has been in development for about a month. "It's cost-effective and very environmentally friendly. We hope to have it on the market by the end of the year," he says.

The engine will go on sale on the domestic market, yet the company is also betting on such innovative new products to have a major impact abroad.

Above: Sinotruk, China's largest truck manufacturer by revenue, made $3 billion last year, with about one-third coming overseas markets. Below: Customer training offered by Sinotruk overseas. Photos Provided to China Daily

China National Heavy Duty Truck Group Co Ltd, commonly known as Sinotruk, is the nation's largest truck manufacturer by revenue. It made $3 billion last year, with about one-third coming from overseas markets.

Executives have set a target to increase that share by more than half by 2020.

"Our aim is to build our international brand and ultimately hit revenue of more than 100 billion yuan ($15.3 billion; 13.8 billion euros)," Chairman Ma Chunji says as he sits in a grand, third-floor conference room of Sinotruk's skyscraper headquarters in a suburb of Jinan, capital of Shandong province.

And the company is confident of realizing these goals, too, "as we plan to invest in research and development overseas, localize and diversify our products, collaborate with more international partners, and apply Internet technologies", he says.

"Only by going global can Sinotruk achieve sustainable development," he adds.

The state-owned company exported 27,000 trucks in 2015, up 8 percent year-on-year, and the forecast for this year is 28,000. Its vehicles are shipped to more than 100 countries and regions, mostly developing economies, but the company aims to develop further in the United States and Europe over the next five years.

Many Chinese companies are looking abroad to boost revenues as the domestic economy slows. However, to be successful, hiring international talent is essential, according to Lu Jinyong, a professor of international investment at Beijing's University of International Business and Economics.

"Chinese automakers really need to hire local talent to help them understand overseas markets and ensure smooth entry," he says.

Lan Junjie, a senior executive at Sintruk in charge international expansion and marketing, says that, in 2010, when the company began to tap foreign markets, it had just 100 employees overseas. Today, it has 300 workers at six assembly plants, and another 1,000 at overseas sales offices.

"We plan to hire even more international talent and set up more international R&D centers," he says, adding that the company also holds about 2,400 patents globally.

One difficulty in tapping a foreign market is different nations' varying laws, standards and requirements for automobiles, Lan says. "So, we're also diversifying our products to cater to the needs of different clients. For example, for customers in Africa, our materials need to be heatproof.

"It takes time to build a global brand," he adds. "We believe we'll gain international recognition step by step by producing more popular products globally. The most effective measure to promote our products is word of mouth, and we believe customers will welcome our products, which are reasonably priced and have good functions."

To further build its global image, Sinotruk also plans to forge more overseas partnerships, such as the one it established with Germany's MAN Group in 2011.

"We've learned a lot from that collaboration," explains Liu Peimin, who is in charge of Internet strategy and overseas expansion. "We construct production lines for engines, axles, cabs and vehicles together, and we've also introduced diesel engines from MAN, which has helped to upgrade our products."

Last year, using research by MAN Group, the Chinese automaker says it boosted annual production capacity in its tractor division by 23 percent (26,000 units), despite the industry seeing an overall decline in capacity of 10 percent.

Advancements in Internet technology have also provided opportunities for Sinotruk to boost its global business. Liu says the company plans to launch an app called Global Village in April that is aimed at helping customers purchase its products and after-sales services.

huhaiyan@chinadaily.com.cn

( China Daily Africa Weekly 03/18/2016 page25)