SAIC wants to use Iveco to realize commercial vehicle "Jiujin"
SAIC is stepping up its efforts in the commercial vehicle sector, aiming to strengthen its position in the market. With a focus on expanding its commercial vehicle business this year, SAIC has set a sales target of 700,000 units, a significant increase from the 553,000 sold last year. This growth strategy includes key players such as SAIC Iveco Hongyan, Nanjing Iveco, Shanghai Huizhong, and Shanghai Shenwo, all working together to achieve rapid development.
In the past year, SAIC has made several strategic moves in the commercial vehicle space, including forming a joint venture with Iveco, acquiring a 67% stake in Chongqing Hongyan, and entering into a comprehensive cooperation agreement with Yuejin Group. Additionally, SAIC acquired a 50.32% equity stake in Shanghai Shichai Co., Ltd. for 923 million yuan. These actions have helped SAIC consolidate its presence in the commercial vehicle industry.
Currently, SAIC's commercial vehicle segment is divided into three main parts: the former Nanjing Automobile Commercial Vehicle segment, Chongqing Hongyan, and the former SAIC Commercial Vehicle segment. The integration of these entities marks a major shift in SAIC’s approach to commercial vehicles, which had previously been a weaker area for the company.
Iveco's involvement has brought new momentum to SAIC's commercial vehicle division. According to Lin Wei, Iveco's product and marketing director, SAIC has historically lagged in the commercial vehicle sector, selling only over 6,000 units last year, compared to NAC’s more than 10 times that number. By leveraging Iveco’s expertise, SAIC aims to build a more complete product lineup across passenger vehicles, commercial vehicles, and components.
Nanjing Iveco plans to boost its sales from 27,000 to 29,000 units in 2008, while Yuejin targets an increase from 58,000 to 65,000 units. These goals are supported by strong performance in January, with Nanjing Iveco sales rising by 18% compared to the same period in 2007.
However, despite these gains, SAIC still faces challenges in the commercial vehicle market. In 2007, Yuejin sold around 40,000 light trucks, capturing only 4.3% of the market, while Iveco’s light passenger sales reached about 24,000 units, with a market share of around 10%. NAC has dropped to ninth place in the commercial vehicle rankings, trailing behind major competitors like Foton, Dongfeng, and Jianghuai.
While SAIC sees potential in integrating Iveco’s resources to strengthen its commercial vehicle portfolio, it will take time to make a real impact. According to the original joint venture agreements, Nanjing Iveco will continue to operate independently for at least three years, limiting SAIC’s direct influence.
The road to full integration is long, but SAIC is committed to making it happen. Lin Wei believes that rationalizing resources and improving R&D capabilities will be essential for future competitiveness. SAIC’s commercial vehicle technology center, established with a 100 million yuan investment two years ago, is already collaborating with the Nanjing Automobile Research Institute.
With continued effort, SAIC hopes to close the gap with industry leaders like FAW and Dongfeng. While the journey is just beginning, the company remains focused on strengthening its commercial vehicle division and building a more robust and diversified automotive portfolio.
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