A truck by Swedish company Scania pictured at the IAA Commercial Vehicles Fair in Hanover, Germany on Sept 19, 2018. [Photo/VCG]

International carmakers are eying China’s commercial vehicle segment, as the government continues to invest in infrastructure and truckers seek comfort and better performance, said experts.

China has been the world’s largest vehicle market since 2009, with passenger vehicles as the mainstay. However, their sales have been falling since 2018, due to factors including limited license plate quotas in affluent metropolises.

The coronavirus has brought total vehicle sales down this year. But commercial vehicles have been insulated from the pandemic thanks to China’s continuous investment in infrastructure.

Statistics from the National Development and Reform Commission show that China’s investment in the first 10 months moved up 0.7 percent year-on-year despite the pandemic.

In the same period, commercial vehicle sales in the first 10 months totaled 4.2 million this year, up 21 percent.

Of them, heavy-duty truck sales grew almost 40 percent to 1.37 million in the first 10 months of 2020. Their sales are expected to hit a new high of 1.6 million for the whole year.

Swedish truck maker Scania, a unit under Volkswagen’s commercial vehicle arm, Traton Group, has bought a truck company in Jiangsu province. It has thus acquired a license to produce its trucks in China for the first time.

It did not reveal the schedule for the first China-made model to roll off the assembly line, but Chinese media reported it would be around 2022.

Like Volvo and Mercedes-Benz, Scania has been selling imported trucks in China, which are priced higher than domestic rivals.

The market is largely dominated by local automakers including FAW Jiefang Group, Dongfeng Motor Group and Sinotruk, which offer more price-competitive vehicles.

“But the demand for modern vehicles with a higher technology content, better performance and higher availability is increasing with the need for more efficient logistics and sustainable transport,” said Scania in a statement.

Li Dakai, former chairman of transmission producer Shaanxi Fast Gear, said more than 90 percent of trucks and buses sold in China have manual gears, which means there is great growth potential for those with automatic transmissions.

He said demand for gas-efficient and smart trucks will grow as well. Li estimated that 50 percent of trucks will be hybrids in 10 or 20 years.

Scania’s President and CEO Henrik Henriksson said it will make significant investments until the end of the 2020s to establish China as the third arm in its global production structure.

Scania’s investments in China include establishing research and development in the country.

“We are aiming for sales in China at the end of the 2020s of at least the same volume as that of our currently single largest market, Brazil,” said Henriksson.

Daimler AG is preparing itself for the production of Mercedes-Benz-branded trucks at its Chinese joint venture, Foton Daimler.

Earlier this month, the joint venture said it would invest over 3.8 billion yuan ($581.75 million) in a new plant in northern Beijing. Production is to start in two years.

The joint venture with BAIC Group’s commercial vehicle unit, Foton, was established in 2012.

It now produces and markets Auman-branded trucks. In the first three-quarters, its deliveries totaled 99,550 units´╝Źan increase of almost 60 percent compared to the same period in 2019.

China, the world’s largest truck market, is of utmost importance to us and has become one of our important markets for future growth,” said Martin Daum, CEO of Daimler Truck.