King Long to deliver better results
Xiamen King Long United Automotive Industry Co Ltd, China's largest bus maker by shipments, is aiming to achieve overseas sales of 5 billion yuan ($762 million) in five years and is looking at mature markets as a growth engine, company officials said.
In China's largest bus export deal to Europe, the company delivered 172 buses to Malta on Saturday for 15 million euros ($21.3 million).
Zhu Guoqiang, vice-president of King Long, said that last year the company sold 6,600 buses to overseas customers for $170 million. Deliveries have grown annually by more than 60 percent on average in the past five years.
Overseas sales will account for 40 percent of the company's total by 2015, said Zhu.
The latest results from the Shanghai-listed company show that it recorded sales of 11.62 billion yuan in the first three quarters of last year, 46 percent higher than the same period in 2009.
Zhu said the growth of Chinese bus exports to Europe has been momentous.
In 2010, the country exported buses and coaches to 12 European countries including France, Germany and Great Britain. Chinese-made buses hold the number-two spot in the market in Italy with 200 buses sold to the country every year.
However, Zhu said in the long term, Chinese buses and coaches must not simply be reliant on their low price to win orders.
Competition in Europe has become increasingly fierce in the wake of the global economic recession and the criteria for market access are very high for Chinese companies.
Austin Gatt, Malta's transportation minister, said the price advantage offered by Chinese bus makers makes them very competitive. He said that Malta has no railway network but has 2,200 kilometers of highway, which provides large domestic demand for transport by bus.
Industry statistics show that China exported 36,517 buses last year, 10 percent of the country's total bus production, with a year-on-year growth rate of 56.97 percent. Sales rose by 62 percent to $1 billion.
Yet the main markets are mostly in developing economies such as Africa and South America.
With their higher profits and large markets, Europe and the US have become very attractive to Chinese bus makers.
China's main bus manufacturers, including King Long and Zhengzhou Yutong Group Co Ltd (Yutong) in Henan province, attended an international commercial vehicle exhibition in Germany in 2010 to show off their technological and marketing strengths.
In its annual report released on Feb 24, Yutong said that it sold 3,000 buses to overseas markets, including 2,000 to Cuba, in 2010. Overseas sales more than doubled last year to 930 million yuan.
