The Chinese market is only just starting to develop, according to Andreas Schmitz, a member of the Schmitz Cargobull board of directors.
Schmitz, with five manufacturing plants in Germany, one in Lithuania, and another in Spain, recently opened a $120.1 million trailer manufacturing plant in Wuhan, China.
In the Chinese market, there are approximately 400 licensed manufacturers and an additional 2,000 small manufacturers operating without a license, according to Schmitz. In part due to safety concerns, the government is now taking action and closing a large number of those plants without a license.
The largest competitor among the major manufacturers covers approximately 15% of Schmitz’s target market. All of the other competitors are far smaller, with a market share of 2 to 3%.
Currently, 175,000 to 200,000 trailers are registered every year in China. Schmitz Cargobull and its joint-venture partner, Dongfeng, aim to achieve a 10% market share within five years.
"Approximately 90% of the transport companies are still owner-operators,” he says. “There is almost no specialization for specific types of transport. That is why the production and sales will initially commence with robust trailers designed to take on many different tasks. Economic developments will give rise to middle-sized and large-scale transport companies over the middle term. Similar to European firms, these transport companies will in turn specialize and require specific types of trailers.”
Schmitz Cargobull believes it has the flexibility to serve this demand in China and plans to expand into Mongolia, Russia and neighboring Asian countries in the coming years.