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China’s heavy-duty truck market in 2013: steady growth

China posted sales of 770,000 heavy-duty trucks in 2013, up 21 percent on a yearly basis, according to the China Association of Automobile Manufacturers.

All of the top five medium and heavy-duty truck makers have fulfilled at least 88 percent of their respective sales targets in 2013. Dongfeng, including Dongfeng Commercial Vehicle Co., Ltd. (DFCV) and Dongfeng Liuzhou, FAW Jiefang, and China National Heavy-Duty Truck Corp. (CNHTC) in particular fulfilled 112, 111 and 100 percent of their respect sales targets.

“FAW Jiefang sold 188,000 medium and heavy-duty trucks in 2013 and increased its market share by 1 percent,” said Jing Qingchun, president of FAW Jiefang Sales Co. “FAW Jiefang’s sales were up 20 percent, above the industry growth of 14 percent,” added Jing.

Note:

1. Sales of Dongfeng, Foton-Daimler (Auman), and FAW Jiefang include medium- and heavy-duty trucks.

2. Sales of Dongfeng include DFCV and Dongfeng Liuzhou. Sales of CNHTC only include heavy-duty trucks.

3. Sales of Shaanxi Auto only include civilian heavy-duty trucks.

 

Both SAIC-IVECO-Hongyan and C&C Trucks have fulfilled their respective sales targets in 2013. Beiben, on the other hand, only completed 54 percent of the year’s goal by selling 19,000 units.

“2013 was a special year for the commercial vehicle industry,” said Gary Huang, president of DFCV. “With the recovery of the macro economy and the postponement of the State IV emissions standards implementation, the heavy-duty truck industry witnessed opportunistic growth in 2013.”

 

Transformation

China had 23 heavy-duty truck makers in 2005, but the number increased to 28 in 2013. Only seven achieved sales of at least 1,000 units in 2005 and total sales of that year were 98,000 units. However, six manufacturers sold at least 10,000 units in 2013 with total industry sales of 770,000 units.

China’s heavy-duty truck industry experienced rapid expansion from 2000 to 2012 with the 2005 to 2014 period a competition era, according to Yang Zaishun, a veteran analyst of the truck industry. Yang predicted the industry will enter an era of fierce competition in 2015 with two-thirds of heavy-duty truck brands facing elimination by 2020. Multinational brands will take up three-fifths of the market share by then with most Chinese brands struggling to stay alive, said Yang.   

Compared with 2010, the market share of whole vehicles in the first 11 months of 2013 increased 5 percent, and market share of chassis decreased 1 percent during the same period. Market share of trailers less than 25 tons did not see much change and that of trailers between 25 to 40 tons dropped 6 percent and trailers larger than 40 tons saw increase of 3 percent.

The heavy-duty truck market in 2013 witnessed many ups and downs. January sales posted 43,000 units but February sales slightly dropped due to impact of the Chinese New Year. The market went into a seasonal sales peak starting from March with sales reaching 86,000 units during the month. Sales fell back to 48,900 units in July with a mild increase after August. Sales of the whole industry jumped in November and December with December sales of 76,000 units.

The implementation of State IV emissions standards has triggered the purchasing enthusiasm of State III compliant-trucks. Some enterprises in Henan and Hebei provinces even worked overtime to fulfill the purchase demand of these trucks.

Market share of whole vehicles saw little change in the first five months, but started to drop in June and rebounded in November with the tendency of decline month by month from the over 30 percent market share in January to less than 30 percent in November. Sales of chassis maintained at the level of only around 20,000 units per month due to weak demand of infrastructure construction, except mild increases in April, May, July and December, said Yang.

Market share of trailers rose from less than 30 percent in January to almost 40 percent in November. The slow recovery of the national economy has pushed up the trailer market, according to Yang.

Dongfeng ranked first in heavy-duty truck sales in 2013. FAW-Jiefang ranked second. CNHTC and Beiqi-Foton ranked third and fourth, while Shaanxi Auto dropped to fifth. The top five sellers of chassis were Dongfeng Group, Dongfeng Motor, CNHTC, FAW, and Shaanxi Auto.

The top five sellers of trailers less than 25 tons through November were FAW Jiefang, Dayun Auto, Dongfeng Motor, China Jinggong Group and Beiqi-Foton. Beiqi-Foton, Dongfeng Motor, FAW Jiefang, Shaanxi Auto and CNHTC were the top five in sales of trailers between 25 and 40 tons. Beiben replaced CAMC Hualing and ranked sixth.

The top five sellers of trailers larger than 40 tons in the first 11 months of 2013 were CNHTC, FAW Jiefang, Shaanxi Auto, Beiben and SAIC-IVECO-Hongyan

The number of newly launched heavy-duty trucks, special-purpose vehicles, and refitted vehicles in 2013 topped those in the past years. Newly launched products included the Beiqi-Foton Auman GTL6 series trailers, Isuzu VC46 heavy-duty trailers, FAW Jiefang new V series, Dongfeng Liuzhou L5 series long-nose trucks, Dongfeng T702, XCMG TFS111 wide body self-dumpers, XCMG YSH12A garbage trucks, CNHTC SITRAK, Sichuan Hyundai Xcient trailers, BAIC heavy-duty truck, FAW Liuzhou Special-Purpose L5R, Dongfeng Volvo UD new Quester, Dongfeng Liuzhou Balong M7C, FAW Jiefang Anjie long-nose truck, Dongfeng Kinland Flagship, and Qingling VC46 trailers.

 

Mixed views on 2014

CNHTC, Shaanxi Auto and Beqi-Foton are all positive on the market outlook for 2014. According to Zhang Xiaodong, general manager of CNHTC sales department, the market will see another year of double-digit growth. “The new administration will implement proactive fiscal and prudent monetary policies with large investment in infrastructure, subway and high-speed rail construction. Sales of engineering trucks will jump in 2014. The recovery of the global economy will also boost export, and the increase of logistics transportation will contribute to the whole industry as well,” said Zhang.

Zhou Yinchao, general manager of Shaanxi Auto Sales Co., believes the market will grow steadily. “According to the forecast model we established, the implementation time of the State IV emissions standards will be a decisive factor.”

“Although the market in 2014 will be impacted by the implementation of the State IV emissions standards, fuel price rise and transport capacity adjustment of railways, segments such as engineering trucks and natural gas trucks could see explosive growth. Our forecast model predicts the market will increase 9.5 percent to 810,000 units,” said Tang Gang, vice president of C&C Trucks.

Wu Yuejun, president of Foton-Daimler, predicted that the market will increase 10 percent in 2014.

FAW Jiefang, Dongfeng and Beiben, on the other hand, remained cautious on 2014.  

“The full implementation of the State IV emissions standards will trigger demand fluctuation, environmental management and economic structural adjustment will also restrain resource demand. Moreover, as many vehicles were upgraded in 2013, the upgrading demand of vehicles will also be weakened in 2014,” said Jing Qingchun, president of FAW Jiefang Sales Co. Jing believed total demand of medium and heavy-duty trucks in 2014 will reach 900,000 units, down 13 percent from 2013.

According to Gary Huang, the implementation of State IV emissions standards in 2013 pushed forward demand of around 50,000 medium and heavy-duty trucks to 2013. Huang predicted the 2014 demand will drop 5 percent to one million units. “Demand will also shift toward more environmentally friendly, intelligent and high-end trucks,” said Huang.

An executive of Beiben predicted a volume of 700,000 heavy-duty trucks in 2014. “The demand of vehicle upgrading, management on air-polluted vehicles, urbanization and the rapid development of logistics industry will bring a better environment for the heavy-duty truck industry,” said the executive.

 

Higher targets in 2014

Most enterprises have higher expectations on the 2014 market.

 

Note:

1. Sales of Dongfeng, Foton-Daimler, and FAW Jiefang include medium and heavy-duty trucks.

2. Sales of Dongfeng stand for DFCV, excluding Dongfeng Liuzhou.

3. Sales of CNHTC are heavy-duty trucks, and the target sales of Shaanxi Auto are civilian vehicles only.

 

According to the above chart, except Dongfeng FAW Jiefang and Shaanxi Auto, all enterprises have set up a higher goal than their 2013 sales volume. Expected sales growth rates at CNHTC and SAIC-IVECO-Hongyan are in the range of 14-16 percent, while the growth targets of Beiben, C&C Trucks and Foton-Daimler are 32, 38 and 37 percent respectively.

 

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