Large market potential "Belt and Road" truck business new business opportunities


"The 'One Belt and One Road' has a long-term driving effect on China's truck and logistics industries. This pulling performance is a large time and a large space. It is comparable to non-general incentive policies," said Tan Xiuqing, vice president of Shandong Heavy Industry.

 


"One Belt and One Road" is the abbreviation of "Silk Road Economic Belt" and "21st Century Maritime Silk Road". The “One Belt and One Road” runs through the Eurasian continent, connecting the Asia-Pacific Economic Circle to the east and the European Economic Circle to the west. Whether it is developing the economy, improving people’s livelihood, coping with the crisis, or accelerating adjustments, many countries along the route have common interests with China. Historically, the land-based Silk Road and the Maritime Silk Road are major channels for China’s economic, trade, and cultural exchanges with Central Asia, Southeast Asia, South Asia, West Asia, East Africa, and Europe.

Where are the opportunities for trucking, logistics and truck repair services in such a vast chessboard?

Market potential increased
According to the statistics of China Association of Automobile Manufacturers, domestic commercial vehicle production and sales in October were 286,380 and 278,317, respectively, down 11.69% and 14.89% year-on-year respectively. Production and sales volume has been lower than the level of the same period of last year for seven consecutive months. Even in the 9th and 10th months, "Jin 9 Silver Ten" did not arrive as expected. Among them, heavy trucks (including non-complete vehicles, semi-trailer tractors) sold a total of 51,296 vehicles, a decrease of 5.77%, a year-on-year decrease of 15.33%; medium-sized trucks (including non-complete vehicles) sales 20144, a year-on-year decrease of 7.9%; light trucks ( Sales of non-complete vehicles included 116,983 vehicles, a year-on-year decrease of 24.64%.

Tan Xiuqing said that on the one hand, the lack of market demand growth, on the other hand, the increase in production capacity, a group of new heavy truck companies to start production, to find markets for these production capacity is a top priority, and the "One Belt and One Road" has brought new market opportunities. “Belt and Road” includes a large number of infrastructure projects, including railways, highways, ports, etc. These projects have large quantities and large scales. Therefore, the continuous demand for construction vehicles will increase the sales of construction vehicles.” Tan Xiuqing said: “In addition, China's oil and gas resources and mineral resources are highly dependent on foreign countries, and these resources mainly enter China through coastal sea routes, and the channels are relatively single. The 'One Belt and One Road' has added a large number of effective land resources access channels, which are very diverse for resource acquisition. important.

In this way, some sea transport will become land transport, increasing the demand for road vehicles. ”

Increase truck exports

At present, China's auto vehicle export scale is relatively small, and it has remained at 1 million vehicles in recent years, accounting for only 4% of domestic sales. Taking into account the downward pressure on the economy and the construction of the “Belt and Road Initiative,” the domestic automotive industry will have an increasing trend toward foreign markets, especially commercial vehicles. The "Belt and Road" strategy has enabled the country to introduce a special financial and fiscal policy, and encourages auto companies to build factories overseas and to drive domestic auto exports. On the whole, the truck industry may usher in a new round of development opportunities under the “One Belt and One Road” initiative and the Asia Pacific Free Trade Zone. "Interconnection is the right thing for the 'Belt and Road Initiative'. Under the guidance of this strategy, China's truck export volume may reach 10% of domestic sales in five years," said a related person from Jianghuai Automobile International.

The relevant personage of Dongfeng Corporation also stated that Dongfeng has obvious advantages in the light truck market, and the current export volume accounts for about 5% of the total sales volume. With the acceleration of the construction of the “Belt and Road”, it is beneficial to the sales of various types of commercial vehicles.

International investors are therefore very optimistic about China's truck and construction machinery companies after the implementation of the "One Belt and One Road" strategy. According to statistics from the Hong Kong Stock Exchange, Zoomlion’s two major business segments, namely concrete machinery and lifting machinery, rank among the top two in the world. Under this strategy, UBS’s large holdings were increased. According to the data, UBS Group increased its holdings of 607.7K shares of Zoomlion H shares on November 4th. After the increase, the total number of shares held was over 75.25 million shares, holding 5.26% of the shares. At the same time, another investment banking agency, the Singapore government, has invested in the holding of several domestic truck and construction machinery company stocks.

Unicom International Logistics Transportation

The “One Belt and One Road” strategy fully relies on existing bilateral and multilateral mechanisms of China and other countries, and utilizes existing and effective regional cooperation platforms. The construction of the “One Belt and One Road” will not only overlap or compete with existing cooperation mechanisms such as the Shanghai Cooperation Organization, the Eurasian Economic Union, and the China-ASEAN Free Trade Area, but will also inject new connotations and vitality into these mechanisms. The “One Belt and One Road” strategy has broken the existing point-and-block regional development model. Whether it is an early special economic zone or the Shanghai Free Trade Zone established last year, it is a single-region development breakthrough. The “One Belt and One Road” revolutionized the punctual and blocky development pattern. Viewed horizontally, it runs through the eastern, central, and western parts of China. It looks vertically, connects major coastal port cities, and continues to extend to Central Asia and ASEAN. This will change the development of China's regional map, more emphasis on the interconnection between provinces and regions, the industry to undertake and transfer, and ultimately China Unicom international logistics and transportation, shaping a large network of international logistics and transportation.

In this network, China's truck companies and logistics companies get the most benefits because many of the roads are invested and constructed in China, which is good for more trucks and logistics users. However, Tan Xiuqing reminded companies that since the “One Belt, One Road” involves many countries and regions, the logistics transportation mileage is longer, so the requirements for vehicle reliability and environmental protection are higher, and the requirements for logistics organization and management are also higher. "For example, environmental protection, if a logistics fleet passes through 10 countries, then the vehicle's emission standards must meet the highest standards in 10 countries." Tan Xiuqing said.

Drive the growth of western truck repair service industry

The Silk Road Economic Belt passes through several provinces and regions in western China. These regions are sparsely populated and there are fewer truck repair service outlets. A truck dealer in Xinjiang said that after the international logistics and transportation links, the pressure on truck repair services will increase dramatically. Since the distance between towns and towns in Xinjiang is far longer than in the mainland, truck repair service outlets must not only be spread over all towns, but must also be added along the roads. The same is true at the goods distribution center.

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