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2013: a better year with challenges

 

China sold 580,400 heavy-duty trucks through November, down 29.6 percent year-on-year and a negative yearly growth is a foregone conclusion.

The heavy-duty market may be at its lowest point in recent years as analysts believe that 2013 could be a better year.

China is in the middle of its heavy industrialization and the process may end around 2025. As China’s economic development model transforms from light to heavy industries, the country is likely to experience a steady upgrade of its industrial and transportation structures, which will boost sales of heavy-duty trucks.

Demand of construction equipment and vehicles will rise in 2013 thanks to the recovery of local infrastructure construction and real estate projects. According to statistics of China Federation of Logistics & Purchasing, China’s highway freight volume and tonnage mileage have increased 14 and 16 percent, respectively, in the first three quarters of 2012 and will further increase in 2013.

The launch of the State IV emissions standards next July will trigger the demand for State III vehicles in advance and boost sales of heavy-duty trucks in the first half of 2013. Moreover, according to the existing life cycle of vehicles, replacement demand in 2013 will contribute to 5 percent in market growth.

Yao Wei, chief editor of find800.cn, believes heavy-duty truck sales will reach 750,000 in 2013 with an increase of 10 percent. Analyst Yang Zaishun is even more upbeat, predicting that total heavy-duty truck sales in 2013 may reach 850,000 units.

Despite a better outlook in the new year, negative factors still exist. For example, consumers are still waiting to see what policies will be adopted by the country’s new leadership. The level of recovery of infrastructure construction and real estate is still unclear. Truckers and logistics companies are still burdened by unfair taxes, tolls, fees and fines, a deterring factor for market demand.

Last but not the least, the explosive growth in 2009 and 2010 has overdrawn market demand. Despite growth prospects in 2013, manufacturers should be happy even if the market goes up in single digit.

 

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