Commercial vehicle manufacturers have released their first half 2015 financial reports, showing a complete different scenario for the truck and bus markets. Although both witnessed sales declines in the past eight months, the bus market was better off than the truck market thanks to new energy buses.
CNHTC net profit drops 37 percent to ¥178 million
According to the half year financial report of China National Heavy-Duty Truck Group Corp. (CNHTC) that was released on August 26, the company registered sales revenue of ¥10.33 billion ($1.58 billion), down 15.5 percent with net profit dropping 37.25 percent to ¥178 million.
According to China Association of Automobile Manufacturers (CAAM), the country sold 295,500 heavy-duty trucks through to June 2015, down 31.13 percent. Besides shrinking customer demand, CNHTC has also suffered from overcapacity, according to the company.
The good news was that CNHTC posted a higher market share than the same period of last year. As the cooperation between CNHTC and MAN progressed ahead helping to adjust product structure, sales totaled 40,000 units in the first half, down 13.8 percent, much better off than the industry average. MAN platform-based products have accounted for nearly one-third of CNHTC sales in the first half, with the company production structure changing from engineering truck dominant to trailer dominant, which is more suited for future industry trends.
JAC: medium-truck a bright spot
Jianghuai Automobile Co., Ltd. (JAC) posted sales revenue of ¥23.52 billion in the first half, up 14.55 percent. Net profit grew 31.79 percent to ¥537 million. The company saw skyrocketing growth in sales of SUVs and MPVs, but performed badly in the commercial vehicle market. JAC sold 92,790 light trucks through to June, a decrease of 5.63 percent, among the only three witnessing negative growth of the top 10 sellers of light trucks. Sales of heavy-duty trucks also dropped 24.42 percent to 17,378 units.
Medium-trucks, on the other hand, remain a bright spot in the first half by delivering 3,963 units, up 29.88 percent, ranking second in the sector in terms of growth.
Light trucks have been the advantage of JAC for years. But its dominant position in the sector was challenged by Jiangling Motors Corp. (JMC), which sold only 2,329 units less than JAC. JAC sold nearly 30,000 units more than its follower Dongfeng during the same period of last year.
JAC plans to invest around ¥2.29 billion, nearly half of its new round of financing on August 11, in high-end and electric light trucks with an overall capacity of 100,000 units (single-shift) per year. But it remains to be seen whether the investment will pay off.
Foton net profit down 42.9 percent to ¥155 million
Sales revenues of Beiqi-Foton Motor Co., Ltd. (Foton) totaled ¥17.22 billion in the first six months, down 8.43 percent, with net profit reaching ¥155 million, a decrease of 42.9 percent.
The company sold 263,480 vehicles (including Auman trucks) in the first half of 2015, down 19.2 percent on a yearly basis. Foton took up 14.6 percent of the commercial vehicle market, a 1.1 percentage point drop compared with the same period of last year, but still topping the sector. The company sold 135,528 engines in the first half, up 19.77 percent. Sales of Ollin engines increased 3.92 percent to 52,726 units. Foton-Cummins posted sales of 82,802 engines, up 32.65 percent.
Foton has been adjusting its product structure from low- to high-end products. Medium- and high-end products accounted for 52.6 percent of Foton sales through to June, up 2.3 percent year-on-year.
Sales of medium- and heavy-duty trucks totaled 42,284 units, down 40.4 percent, higher than the 30.5 percent industry average. The company posted a 10.9 percent market share, down 1.8 percentage points year-on-year due to market structural change from coal and engineering transportation to medium- and high-end logistics transportation. As Foton Auman has almost finished its business structure adjustment, the company will continue to increase the ratio of medium- and high-end products and improve market competency.
Sales of light trucks (including micro trucks) were 197,047 units, down 14.4 percent. Foton still led the sector in sales but had a higher decrease than the industry average drop of 10.5 percent. Market share declined 0.8 percentage point to 18.2 percent since the company’s major light truck products were low-end ones which could not satisfy the higher State-IV emissions standards. The company will further promote the structural adjustment to increase the proportion of medium- and high-end light trucks.
Sales of large and medium buses dropped 12.5 percent to 2,946 units, larger than the industry average of 9.4 percent with market share decreasing 0.2 percentage point to 4.6 percent. The company will focus on the public transport bus market and grab opportunities from the growing new energy bus market.
Light bus sales plummeted 16.1 percent to 14,632 units, a drastic decline compared with the 4.3 percent average industry growth. Market share also descended 1.6 percentage points to 6.7 percent. The company will promote products that reach the fuel consumption limit and increase sales for the next step.
Foton exported 32,422 vehicles in the first half, up 21.4 percent with the Americas, Southeast Asia, West Asia, North Africa, Central Africa and South Africa as major export destinations.
King Long and Yutong witness new energy bus boom
Yutong Bus reported sales revenues of ¥10.39 billion, up 10.42 percent in the first half and registered net profit of ¥946 million, up 15.35 percent. Domestic sales revenues increased 9.77 percent to ¥7.85 billion, while overseas sales revenues decreased 1.76 percent to ¥1.75 billion.
The company sold 24,079 vehicles during the first half, up 2.95 percent with new energy bus sales increasing 102.7 percent to 3,645 units.
Similar with Yutong, Xiamen King Long Motor Group witnessed sales increase thanks to the boom in new energy vehicle sales.
The group sold 39,051 buses in the first half, down 2.7 percent on a yearly basis. Large and medium bus sales fell 5.1 percent to 16,746 units. Light bus sales dropped 0.9 percent to 22,305 units. Export also declined 10.3 percent to 12,173 units. Sales revenues increased 11.5 percent to ¥10.28 billion with export revenues accounting for ¥2.23 billion, down 0.35 percent. Net profit jumped 86.4 percent to ¥148 million, according to the company’s first half 2015 financial report.
Energy-saving and new energy vehicle sales grew rapidly through to June with an increase of 609.4 percent to 4,150 units and made major contribution to the net profit increase of the company.
Asiastar Bus reduces loss
According to the half year report of Jiangsu Asiastar Bus Group Corp., the company sold 1,647 buses in the first half, up 16.4 percent, with sales revenues increasing 30.53 percent to ¥578.84 million. The company posted a net loss of ¥41.15 million, less than the ¥55.23 million loss in 2014. Asiastar accelerated R&D and improvement of new products and expanded production range during the first half of the year.
Both truck and bus manufacturers are bound to recover in the remaining of the year, suggested industry experts.
As over 100 policies were released in rejuvenating the macroeconomy in the first half, commercial vehicle sales performed better in the first half than in the first quarter, indicating a better second half.
The number of new energy commercial vehicle models jumped from the 82 in volume 65 to 214 in volume 71 of the Energy-Saving and New Energy Vehicle Promotion Recommendation Model Catalogue, indicating the determination of the country in promoting new energy commercial vehicles. New energy commercial vehicle production increased 17 fold in July, accounting for 31 percent of July commercial vehicle production.
As Beijing and Zhangjiakou won the bid in hosting the 2022 Winter Olympics, the environmental pressure in Beijing, Tianjin and surrounding areas are getting intensified and grants energy-saving and new energy commercial vehicles better prospects in the future.