Great Wall, Ford meets the growing demand of Chinese pickup trucks

BEIJING (Reuters) – Gray Liu bought his third vehicle four months ago – a Foton pickup truck, attracted by his $ 7,000 selling price and his ability to transport his sports motorbike in the grbadlands of northern China where he like to drive.

The Beijing-based businessman is part of the growing number of Chinese drivers who are particularly interested in pickup trucks, whether for leisure or just because they love them, thus expanding the market beyond the demand traditional agricultural work, construction and maintenance.

While describing his pickup truck as a "big toy", the 35-year-old notes that some of his friends also have one. "There are more and more people like us," Liu said.

Demand for pickup – related to work and new consumer interest – has increased due to easing of government restrictions and last year China became the world's second largest pickup truck market.

Signs this year that the rules could still be eased are prompting industry leaders and badysts to talk about doubling potential or even increasing demand. In turn, this boosts Great Wall Motor Co, China's largest pickup manufacturer, and Ford Motor Co, the manufacturer of the most popular US pickup series, to strengthen product lines.

According to President Wang Fengying, Reuters, Great Wall is currently developing its first leisure model, thus revealing a plan until then unknown.

"We believe that the demand for multipurpose vans will soon begin to take off significantly," she said in a written statement, without providing more details.

The price of the new truck will be much higher than the current models and will be one of five new pickups over the next three years, sources informed of the Great Wall plan said, refusing to be identified because they were not allowed to speak.

At least one of the five would be an electric model, they added.

DETAILED RESTRICTIONS

While global demand for the world's largest auto market has declined for the first time since the 1990s, van sales have increased 10% to about 452,000 vehicles for a fourth consecutive year of growth, according to the report. LMC Automotive Consulting.

(CHART: Chinese vans sales soar – tmsnrt.rs/2Ogjm2A)

This has helped China to overtake Canada as a light truck market, although it is far behind the US figures of just under 3 million. As in the rest of the world, the segment remains a niche in China, accounting for less than 2% of total sales. This contrasts with 16% in the United States and over 40% in Thailand.

Chinese demand increased after the government in 2016 allowed pickup trucks to enter certain urban areas in four of the 31 regions of the mainland province. Last year, the demands that pickups carry large unsightly labels clearly identifying them as commercial vehicles were dropped, making vehicles much more attractive to traditional consumers.

Then, in January, the Chinese planning agency announced that it would gradually relax the restrictions on collections in cities, as part of measures to increase consumer spending. However, it did not specify when and where the rules could be relaxed.

According to the management, executives and badysts estimate that the annual demand for data collection in China could double or triple, even if parking opportunities are limited in the largest cities of the country, such as Shanghai.

"If China allows pickup trucks to enter the central areas of several cities, the market could reach 1 to 2 million units a year," said Yale Zhang, head of Shanghai-based Automotive Foresight Consulting.

PREVIOUS PRODUCTS

The new Great Wall pickup truck would be similar to the average size of the Ford Ranger and would cost more than 200,000 yuan ($ 29,800), an increase of at least 70 percent from its currently most expensive pickup truck. announced sources close to the project.

"Our goal is to make this high-end pickup more like a pbadenger car and its interior design similar to our SUV models," said one source.

According to a separate source, the vehicle is part of the company's plan to eventually enter the United States, although the model is likely to be modified. Great Wall aimed to enter the US market in 2021, but trade tensions between the United States and China made exports from China unprofitable.

Ford plans to launch a new pickup truck in China this year, adding to the Raptor F150 introduced early 2017 and the Ranger that was launched in 2018. Sales of the Raptor, priced at 466,800 yuan ($ 69,565), tripled at nearly 2,500 vehicles. Last year, the company said. He refused to divulge sales of the Ranger, which sold for 305,800 yuan ($ 45,570).

"Ford continues to see growing opportunities in the Chinese light truck market, due to a combination of regulatory conditions and a growing consumer interest," said a spokesman in a statement sent by mail. electronic.

While China is pushing the development of electric vehicles, some domestic manufacturers have joined Great Wall to examine electric microphones, including Ford partner Jiangling Motors and Volkswagen partner JAC Motors.

Zhejiang Geely Holding Group Co. is currently developing a new electric van, a company source told Reuters, adding that it would be manufactured by its Yuan Cheng Auto unit. The source, who declined to be named because the plans are not public, did not provide more details.

However, some global car manufacturers have yet to enter the market and their models are mainly imported and sold by independent dealers.

Li Jiyuan, who works at a dealership selling Toyota Motor Corp. and RAM vans, said his company was somewhat affected by the uncertainties of the trade war. To drive more traffic, the dealership will expand its sales of BMW sport utility vehicles and explore online sales, he added.