Toyota-backed truckmaker bets on aftersales service to fend off Chinese EV rivals

{"text":[[{"start":9.22,"text":"Established truckmakers can slow China’s relentless export push by pitching customers on their extensive repair and maintenance networks, said the head of a Toyota-backed heavy-duty vehicles producer."}],[{"start":20.24,"text":"Karl Deppen, chief executive of Archion, which owns Hino Motors and Mitsubishi Fuso Truck and Bus, told the FT that Chinese truckmakers’ advance into developing Asian markets would face much bigger obstacles than their electric car peers, which have swiftly flooded the sector with low-cost models."}],[{"start":38.04,"text":"“Our industry is very different from [consumer cars] as we have a very strong focus on our service network,” he said, citing the company’s 3,700 global sales and service locations. “Because the brand is known, everybody knows parts are available, the service is ready. That’s unknown for an unknown brand.”"}],[{"start":57.52,"text":"The issue of aftersales service quality came to the fore after disastrous floods in Thailand in September. While Toyota, the world’s biggest seller of cars by volume, rapidly rolled out repairs and parts discounts through its dealers in the country, Chinese EV maker BYD responded more slowly."}],[{"start":74.7,"text":"“Toyota’s decades-long investment in dealerships, service networks, spare parts logistics, financing and customer relationships remains a significant competitive moat,” Bernstein analysts wrote in a note last month."}],[{"start":88.2,"text":"Seeking to challenge that moat are Chinese truckmakers, which have quadrupled their exports of vehicles heavier than six tonnes to nearly 420,000 units since 2021, according to UK-based truck market forecaster KGP."}],[{"start":102.6,"text":"Large volumes went to Russia after its full-scale invasion of Ukraine in 2022 led to parts shortages among local producers Kamaz and Gaz."}],[{"start":111.32,"text":"But a subsequent tightening of trade measures by Moscow to fend off the import surge has meant Chinese companies are on an export offensive in Africa, south-east Asia, the Middle East and Europe."}],[{"start":null,"text":"

"}],[{"start":121.88,"text":"Japan, the market leader in south-east Asia, saw its share of truck sales there fall from 68 per cent in 2023 to little over half last year, while China’s share jumped to 39 per cent, according to data provider Mobility Global."}],[{"start":135.52,"text":"Chinese trucks, including diesel and electric models, have become attractive to buyers for their lower price tag and improving quality. The country has made particularly strong inroads into Indonesia’s mining industry, where charging infrastructure and servicing can be more easily managed."}],[{"start":152.32,"text":"To strengthen Japan’s truck industry against Chinese competitors, Toyota and Daimler Truck combined their subsidiaries Hino and Fuso in April to form Archion. The parent companies each hold a quarter stake in the merged group."}],[{"start":167.18,"text":"Archion is planning to increase truck sales and revenue by almost 30 per cent to 280,000 units and ¥2.8tn ($17.8bn) by 2032. It hopes to improve profitability by manufacturing 85 per cent of trucks on shared platforms where different models can use the same parts."}],[{"start":188.56,"text":"But its combined sales have already slumped 40 per cent from a 2018 peak of 367,000 units, partly because of an engine certification scandal at Hino and Chinese competition."}],[{"start":201.08,"text":"Robin Zeng, chief executive of Chinese battery maker CATL, which has launched a battery for trucks, has estimated that half of China’s truck fleet will be electric within three years — a trend gaining momentum from high diesel prices."}],[{"start":215.36,"text":"If the industry shifts to battery-powered models, China is expected to have a technological and cost advantage. But the majority of Chinese truck exports remain diesel-powered and many customers are unconvinced about the viability of electric trucks."}],[{"start":229,"text":"“We will see in other markets that the development is following a different pace and may also see different solutions,” said Deppen, referring to options such as hydrogen, which Archion is developing, and biofuel."}],[{"start":242.36,"text":"Kota Yuzawa, head of Asia automotive research at Goldman Sachs, said truck electrification was unlikely to proceed as quickly outside China because battery-powered models sacrifice up to 10 per cent of carrying capacity versus diesel."}],[{"start":256.26,"text":"He agreed with Deppen that Archion’s dealership network would be “very hard to replicate” and create “a certain barrier to entry” in south-east Asia, but he cautioned that “it’s not an easy job to protect the market”."}],[{"start":273.06,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793510427_7457.mp3"}