Yes I know few of you are interested in China’s commercial truck market. I am somewhat interested in China’s commercial truck market, but only because I used to do all of the international work for a large commercial truck manufacturer until it was bought by an even larger commercial truck manufacturer. But whether you are interested in commercial trucks or not, I strongly recommend that you read Bill Russo’s Five part series on Competing in China’s Commercial Truck Market. The first of the series is here, the second here, the third here, the fourth here, and the fifth here. But Why?
Because Bill Russo just flat out knows China’s commercial truck business knows what it will take for foreign companies to compete in it. And because what it will take for foreign companies to compete successfully in China’s commercial truck business has all sorts of parallels to what it will take for foreign companies to compete successfully in a whole host (all?) other businesses in China. In other words, Russo’s five part series makes for great reading for anyone doing business in China or looking to do business in China.
Just by way of a brief example, I quote you the following from part five:
Most multi-national companies that aspire to be global leaders have no choice but to find a way to win in the Chinese mid-market.
The common strategies employed by MNCs are to
- Ignore the risk and avoid competing in China’s mid-market altogether.
- Offer global products and wait until China catches up to more upscale demand, which works only for a limited number of sectors.
- Pursue a two-tier strategy with a core brand sold along with a lower-priced “good enough” brand considered. MAN is following this approach since early 2011 and Daimler trucks are considering it with their partner Foton.Multinationals simply cannot afford to cede this mid-market to local competitors. Instead, they must set about organizing themselves to face the emerging Chinese competitors on their own terms — with products that meet Chinese needs, developed at Chinese cost, and which can then be taken out of China to other markets around the world. They must stop thinking about what it is they can bring to China, and instead start focusing on what China’s mid-market can offer them — what culture and structures they must adopt that will allow them to innovate at a lower cost and to deliver the goods and services that will drive the next round of global growth.