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China’s heavy-duty market in the first quarter of 2011: slowed growth

The growth of China’s heavy-duty vehicle market has slowed down significantly in the first quarter of 2011 after a 40 percent jump in 2010 that was due mostly to the record-breaking performance in the heavy-duty truck sector.

According to CBU-Autostats V15N3 based on data from China Association of Automobile Manufacturers (CAAM), China sold 392,126 heavy-duty vehicles (heavy-duty and medium trucks, large and medium buses, including chassis and semi-tractor trailers) in the first quarter of 2011 (see Table 1 and also China HDV Sales by Vehicle Type and Leading Make, March 2011 on p. 9), up just under 6 percent from the same period last year.

<Table 1 file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>
<PHOTO: Growths in the heavy-duty truck and large bus sectors in the first quarter of 2011 slowed to single digits while medium trucks and buses saw negative growths>
<PHOTO file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>
Growth in both the heavy-duty truck (including chassis and semi-tractor trailers) and large bus sectors slowed to single digits from last year’s double digit high rates, while those in the medium truck and bus sectors went into the negative territory after minimal growth in 2010. With the shrinking medium truck and bus sectors, the proportion of heavy-duty trucks among heavy-duty vehicles continued to increase, up 4 percentage points from the end of last year to account for nearly three-quarters of the heavy-duty market. Medium trucks accounted for close to 18 percent, while large and medium buses accounted for a combined 8 percent, all down at least one percentage point compared with those at the end of 2010.

Semi-tractor trailers drag down heavy-duty truck growth
Following last year’s record-breaking sales volume of more than 1 million units on a growth of 60 percent, the heavy-duty truck market, as many predicted, slowed significantly in the first quarter of 2011, increasing “only” 8.5 percent to just over 290,000 units (see Table 2).  

<Table 2 file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>
<PHOTO: Demand for semi-tractor trailers fell big in Q1 2011, pulling down overall heavy-duty truck market growth>
<PHOTO file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>
Although whole vehicles still performed quite well with a 58 percent growth in the first quarter, the heavy-duty truck sector was bogged down mainly by semi-tractor trailers, which saw sales decline nearly 22 percent year-on-year to 76,000 units. This is in sharp comparison to the first quarter of last year, when growth jumped a whopping 530 percent, ending the year with a near 70 percent clip. This resulted in semi-tractor trailers losing a full 10-percentage point in market share of different vehicle types in the heavy-duty truck sector. Chassis and semi-tractor trailers now account for just over two-thirds of the heavy-duty truck market, compared with the combined three-quarter market share that they traditionally hold.

Industry experts attribute the sudden drop in semi-tractor trailer demand to the overdraft of the sector in 2009 and 2010, when demand was pulled forward by a rebound in China’s import and export activities, which increased demand for port logistics and shipment of goods through roadways. The overabundance of semi-tractor trailer parc and stagnant logistics transport needs have therefore hampered demand for this vehicle type, the darling of last year’s heavy-duty truck market.  

DFCV takes over top spot in heavy-duty truck “Elite Eight” while FAW falls to No. 3
While new players such as C&C Trucks (to be featured in the next issue of CBU-HeavyDuty) and Dayun Motor have joined the fray thanks to the booming heavy-duty truck market over the last few years, the traditional “Elite Eight” players continue to account for the bulk of the market share (see Table 3). In the first quarter, these players accounted for more than 92 percent of the market, roughly the same as that in the first quarter of last year.

The biggest change, however, was that of a major shift in ranking of the top three players, which make up the “first-tier” group of the “Elite Eight.” Dongfeng Commercial Vehicle Co. (DFCV) dethroned FAW Jiefang to become the top heavy-duty truck maker in sales. In the process, it solidified itself as the leading heavy-duty and medium truck maker, a position it has held for 7 years in a row. FAW Jiefang dropped to No. 3 after exhibiting a lackluster 21.6 percent drop in heavy-duty truck sales, mirroring the negative growth of semi-tractor trailers. China National Heavy-Duty Truck Group Corp. (CNHTC or Sinotruk) remained as the No. 2 player although its sales were stagnant.

The reasons for this mixed performance were due to the fact that special-purpose vehicles such as dump trucks, cement mixing trucks and engineering vehicles accounted for the majority of the heavy-duty truck sales, while semi-tractor trailers lost their attractiveness as demand for road transport weakened. Dongfeng and CNHTC were able to capitalize on this characteristic thanks to their wide array of product portfolio. FAW Jiefang, however, took a hit primarily due to the fact that it has long been dominant in semi-tractor trailer sales. All together, these three players had a combined market share of 56.8 percent, down from 6.5 percentage points from the same period of last year.

<Table 3 file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>
<PHOTO: Dongfeng became the No. 1 heavy-duty truck maker in Q1 2011 while last year’s leader FAW dropped to No. 3 owing to a big decline in semi-tractor trailer sales>
<Photo file: Sales of heavy duty trucks by leading make.ppt under Z: Z:CBUCBU-HeavyDutyV2V2N7>
Shaanxi Auto and Beiqi-Foton remained as the No. 4 and 5 heavy-duty truck makers, forming the “second-tier” group with respective sales of over 30,000 units and combined market share of around 22 percent. Beiben, SAIC-IVECO-Hongyan and JAC, which form the remaining tier in the top 8, all had surprising higher than industry average growths, as each was able to sell at least 10,000 trucks and increase respective market share. The three players had a combined market share of 13.6 percent, up nearly 5 percentage points from Q1 2010. JAC, in particular, beat out Hualing Auto for the No. 8 spot and in the process increased its market share by more than 2 percentage points, thanks to the popularity of its light-weighted heavy-duty truck models under the Gallop model series.

Yutong and “Three Dragons” still dominant in large and medium bus sectors
In the large and medium bus sectors (excluding chassis), Yutong solidified its foothold as the undisputed leader in both, while the “Three Dragons” of King Long United (Suzhou), Xiamen King Long and Xiamen Golden Dragon remained the second-tier group in sales.
In the large bus market, all four players saw higher than industry average sales growth. As a result, their combined market share was able to jump almost 10 percentage points to nearly 70 percent. Jinhua North Bus Manufacturing beat out Huanghai Auto to round out the top 5.
<PHOTO: Yutong and the “Three Dragons” increased their combined market share in the large bus sector by nearly 10 percentage points to almost 70 percent>
<PHOTO file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>
In the medium bus market, Sichuan-FAW-Toyota (SFTM), notably, had the biggest year-on-year growth, gaining more than 5 percentage points in market share. Together with Yutong and the “Three Dragons,” these five players accounted for more than three-quarters of the medium bus market.
<PHOTO: Yutong remained the leader in the medium bus market but SFTM came up strong with its popular Coaster medium bus, stealing market share from the “Three Dragons>
<PHOTO file: Feature 2 Stats.xls under Z: Z:CBUCBU-HeavyDutyV2V2N7>

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