Xu Xuegui, the chief analyst of Guosen Securities' Automotive Industry division, points out that in the commercial vehicle sector, there have been very few successful joint ventures. For example, the collaboration between Yutong and German manufacturer MAN on chassis development did not go well. Similarly, the joint venture between Mercedes-Benz and Yangzhou Yaxing Bus Factory failed, as did the partnership between Isuzu and Guangzhou Automobile. Even the long-anticipated joint venture between the Volvo Group and CNHTC, which had initially shown promise in the Chinese market, ultimately ended in failure.
According to Xu, these experiences highlight significant challenges for foreign automakers in China. She suggests that such joint ventures often end up being a loss for the foreign partners. While they may provide technical support or access to local markets, the expected returns—such as increased market share—have not materialized. One key reason is that foreign truck companies are often dissatisfied with the Chinese market due to its price-sensitive nature. Chinese consumers tend to favor low-cost products, while foreign firms typically operate with higher pricing models.
"In these joint ventures, both sides have different expectations," Xu explains. "Foreign companies are looking for market access, while Chinese partners focus on gaining technological expertise. This mismatch can lead to misalignment and eventual failure."
However, past failures do not necessarily mean future collaborations will fail. Domestic manufacturers remain keen to partner with international giants, especially those with strong capital and advanced technology. A good example is the joint venture between Dongfeng and Cummins Inc., where both companies hold a 50% stake. Dongfeng Cummins Engine Co., Ltd. has proven highly profitable, with Cummins' global brand reputation playing a key role in securing overseas contracts.
Looking ahead, Volvo, which previously partnered with Dongfeng, might find new opportunities. Having learned from past experiences, the company could leverage its partnerships more effectively and tap into the growing Chinese market with renewed energy and strategy.
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