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Western truck makers clash with Chinese in Mideast

While Chinese truck manufacturers have invested in product quality and service in the Middle East, Western brands will need to expand their presence with high-tech trucks in the region, a report said.

Now is an outstanding time to rebuild market presence in the Middle East, as structural shifts directly play to the advantage of high-quality truck manufacturers, said the new study entitled “The Truck Industry in the Middle East: Strategic growth opportunities in an underestimated region” by Arthur D Little, a strategy and innovation consultancy.

After years with relatively low sales figures, the demand for commercial vehicles in various regions will rise, the report said.

However, dedicated strategies are necessary to leverage the growth potential, while the relatively new market entrants from China, in particular, need to revise their approaches to the region.

The Middle East’s commercial vehicle sector will grow at 47 per cent for the next decade. High-end vehicles (+106 per cent) and those in the medium price segment (+29 per cent) will especially benefit from the upswing, because these correspond to the difficult conditions of the region.

Budget trucks, with which Chinese suppliers have been the dominant players in past years, will lose their relevance. Nevertheless, it will be very difficult for European suppliers to regain their lost market leadership.

Western brands will need to expand their presence in the Middle East, and possibly even (re-)enter markets with high-tech trucks calibrated to the region at price points that are still realistic. The duel between the two manufacturing regions is an important signal to other regions, especially the emerging markets in Southeast Asia and Africa.

For Chinese and European manufacturers, these are extremely important as future growth regions. – TradeArabia News Service

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