Global commercial vehicle supplier SAF-HOLLAND reports receiving a “milestone” order from the Chinese transportation vehicle and trailer manufacturer Changjiu as equipment demand and more stringent safety regulations drive SAF-HOLLAND expansion in the region.
Changjiu Special Vehicle Group will now equip its semi-trailers with axle and suspension systems from SAF-HOLLAND using special low loader axle systems equipped with the SAF MODUL air suspension system. The delivery agreement covers a period of five years with delivery of the first systems already underway. Sales of around EUR 15 million are expected in 2018 under this agreement.
The main driver of the strong demand for weight-reduced truck and trailer components in China is the restrictions on the total weight permitted for vehicles and truck and trailer combinations, which were introduced in September 2016. This has sparked increasing customer interest in more sophisticated, weight-saving systems, such as those offered by SAF-HOLLAND, according to the company.
At the same time, dimension limits and loading regulations introduced for the vehicle transportation segment came into effect, which has led to a significant reduction in the number of transportable vehicles per semi-trailer. As a result, experts assume that it will be necessary to expand existing transportation capacity in this segment by 20% to 40%.
In addition, the new GB 7258 regulation, which will take effect in stages, prescribes the use of disc brakes and air suspensions for all trucks and trailers transporting dangerous goods for safety reasons. As a specialist in this field, SAF-HOLLAND therefore expects to see favorable opportunities for further sales and earnings growth in China.
“As a result of the new legislation, we expect demand for new trucks and trailers in China to remain high in the years ahead, especially for the transportation of dangerous goods and vehicles. In order to fulfill the legal requirements, components must meet stringent quality and safety requirements,” explains SAF-HOLLAND CEO Detlef Borghardt. “The premium segment, where SAF-HOLLAND is well positioned with its product portfolio and years of expertise, stands to benefit the most from these requirements.”
Additionally, SAF-HOLLAND Group is significantly expanding its production capacity in China to realize the region's strong expected organic growth in the years ahead, particularly for modern trailer axle and suspension systems.
CFO Dr Matthias Heiden sees China as one of the most important growth markets for the transportation industry. "With this milestone contract and our greenfield investment, we are laying the groundwork for our company's long-term and profitable growth in this region," Heiden says.