Construction machinery and vehicles built by Chinese companies aren’t seen as competitors by producers and sellers of European premium products.
Markus Geyer, MAN Truck & Bus Group head of sales for the MENA region, says that currently Chinese manufacturers are not a serious challenge in the markets in which MAN operates.
“They haven’t got the quality, they haven’t got the logistical processes behind them to support the product.”
Geyer believes that, in terms of trucks, Chinese products may appeal to buyers who will look to keep them running only over the short length of a project.
“We can’t have a business model for our trucks where you amortise them in two years; our trucks need to run for six-eight-ten years or even 20 years, depending on the application. And we support the product as long as that.
Likewise, FAMCO MD Paul Floyd distinguishes between its products, including Volvo Construction Equipment, and Chinese-produced machinery.
“FAMCO is a premium brand company. Our products are high-quality, reliable, well-engineered products that have a reputation for longevity.
“We don’t view Chinese products as competitors; we view them as servicing a different segment of the market, which would not be a segment of the market that would normally buy the sort of equipment we are selling. We just see it as being different, and meeting the needs of a different type of customer.”
Chinese manufacturers recognise that there may be a quality difference, but believe that, on the one hand, the quality of Chinese products has improved in leaps and bounds, and on the other hand, many are using componentry sourced from top-notch suppliers.
One manufacturer, speaking to PMV, says that, while in the past, the gap between Chinese and European products has been undeniable, now the difference is so small that it is not a factor for buyers in the Middle East when price is taken into account.
Geyer believes that the threat of Chinese companies should be taken seriously, due to their huge numbers, and the speed of their development, but at the same time should not be overstated.
“We must not underestimate the Chinese, but we must not be paralysed either. It is a bit like the Japanese; when they dominated the passenger car market, and everybody thought, ‘That’s it for the European and North American car industry’. It hasn’t happened. As long as you keep working hard and try and be innovative, there will be a marketplace.”
