Taking on the UK heavyweights

China's top industrial vehicle maker sets up shop in Britain selling forklifts and excavators

China's leading industrial vehicle manufacturer, Chery Detank, is expanding into the UK market by selling its excavators and forklifts, competing head to head with established international brands like UK-based JCB and US-based Caterpillar.

The Chinese heavy equipment maker has established a joint venture with Autobahn International, a British direct wholesale automobile supplier, initially to sell excavators and forklifts, followed by agricultural equipment 18 months later.

Lash Saranna, managing director of Detank UK, says its main advantage in the United Kingdom is cost, combined with robust quality.

"The features of our products are similar to others, but price attraction is the biggest unique selling point. We can be very competitive with all the brands that already exist in the market," says Saranna.

Detank UK is a joint venture between the two companies, with Autobahn investing around 2 million pounds ($3.4 million; 2.5 million euros) for a 95 percent share of the venture, which is based in the English Midlands city of Coventry.

Chery Detank is the heavy industry arm of Chery Holding, which is the parent company of several brands including Chery Automobile, the car company that established a joint venture with Jaguar Land Rover in China.

Chery Detank was established in 2010 and focuses on heavy machinery research and development and manufacturing, covering a range of sectors including construction machinery and marine equipment. Its headquarters is in Wuhu city, East China's Anhui province.

Saranna says he facilitated the joint venture by going to China to see Detank up close and bring it to the UK if it measured up to expectations.

"I went to China to find a Chinese brand that didn't exist in the UK, to bring it here because this is the way the future will be. Chinese products will come to the UK, and the trend will grow."

Saranna says he initially got the inspiration for the joint venture when he noticed a trend of well-made Chinese manufactured products entering international markets. He looked online and picked Detank as a product he hoped to import, then went to meet Detank's team in September.

At Autobahn International, Saranna specialized in selling Porsche cars for 30 years, but he says three years ago he decided he would like to focus on building a less well-known brand instead.

Following discussions with Detank in China, Saranna felt convinced about the product's quality and the company's global ambition, so he established the joint venture. The products will be manufactured in China by Chery Detank, and Saranna's team will work to establish dealerships in the UK.

He says Detank UK already has 11 dealers across Scotland, Wales and England, covering cities including London, Newcastle, Glasgow, Edinburgh, Belfast and Liverpool. His team hopes is to have 20 dealerships by the end of the year.

Saranna says he chose to launch the Detank excavators and forklifts first because the UK's construction market is booming after a long down period since the financial crisis. "The trend started a year ago when the UK started to shift into gear," Saranna says.

The excavators' capacity is from 15 to 38 tons. A broader range of excavators will be introduced to the UK market over the next year, including both 6-ton and 46-ton variants.

Its forklifts come in diesel, LPG and electric options, all of which are suitable for handling shipping containers at ports, as well as other uses.

Detank's excavators cost 60,000 to 200,000 pounds - about 25,000 pounds less than similar products from JCB and Caterpillar. Its forklifts range in price between 17,500 and 90,000 pounds, some 18,000 pounds less than JCB and Caterpillar.

Detank's excavators come in five different models in the UK, with four models for forklifts. The products are manufactured to comply with the latest European legislation, according to the company.

Saranna says there are certain features that mark Detank's products as different from more established Western brands, but these features do not affect the key function of the machines. For example, Caterpillar machines' general packet radio service allows for access to the diagnostic system, which Detank does not.

"Brands like Caterpillar and JCB have been established in the UK for so long that they charge more - the brand carries weight. But Detank is unknown in the UK, so we look forward to establishing it. There is very little difference in features," says Saranna.

Saranna says Detank products are more robust than those of competitors since the company conducts much more rigorous "continuous performance" tests in its factory to prove its quality.

'These tough and demanding tests prove the number of hours each machine can work without failure, so customers can be assured that they will have no downtime due to any problems or failure of parts," Saranna says.

Detank also supports its products with better warranties than those of its competitors, he adds.

The forklifts have a 12-month manufacturer's warranty. The standard warranty for excavators is offered against failure within 1,000 hours in the first year, 2,000 hours in the second year and 3,000 hours in the third year. But its extended warranties provide coverage for 2,000, 4,000 and 6,000 hours in the first, second and third years, respectively.

Zhou Xiaoming, minister counselor of the Chinese embassy in the UK, says the cooperation between Chery Detank and Autobahn International has had excellent results. Zhou says Chery Detank has been very successful in international business and is helping to promote Britain-China trade.

"The establishment of Detank UK operations will bring a new element and energy to its globalization process," Zhou says.

cecily.liu@chinadaily.com.cn

(China Daily European Weekly 07/11/2014 page22)