Happy Chinese New Year of the Horse!
The year 2013 turned out to be a surprisingly good year for the heavy-duty vehicle market, which rose 12.4 percent to about 1.23 million vehicles (see p. 9). The heavy-duty market was buoyed by the strong growth in the heavy-duty truck sector, which “galloped” ahead with a 21.7 percent rise after two consecutive years of sales declines.
What holds in store for 2014? Can the market maintain momentum and grow further or are we going to see a decline in the Year of the Horse, which in Chinese culture represents speed and perseverance?
Yao Wei, our guest columnist, believes that the heavy-duty truck market will neither go up nor down this year simply because there is a balance of positive and negative factors. We believe that whatever happens, the sharp drop in 2011 and rise in 2013 are both unlikely to repeat in 2014.
The implementation of State IV emissions standards for heavy-duty vehicles again is likely to cause a spike in heavy-duty truck sales in the month preceding the exact timing of the implementation, which remains undecided. But this factor is unlikely to make a huge dent in sales for the year. In the long run, however, a level as high as 770,000 units is probably unsustainable.
A more interesting trend to look at will be the shuffling of leading players in the heavy-duty truck market, as pointed out in the other feature of this issue (see p. 1). Both the first- and second-tier groups of players in the top 10 are likely to see ranking switches. In fact, January has already witnessed this trend as CNHTC took over the lead from Dongfeng while FAW Jiefang fell to third from second, according to data announced by China Association of Automobile Manufacturers on February 13. The difference in sales among the three was less than 100 units and it looks like any of them could end up as No. 1 when 2014 is done.
How the major truck JVs such as Foton-Daimler, Dongfeng-Volvo, JAC-Navistar and CNHTC-MAN as well as new players such as C&C Trucks and Chang’an Heavy-Duty fare in the year will be another factor to watch.
While there is more stability and less movement as far as players in the bus sector, it will be interesting to see whether electric and plug-in hybrid bus market can get a further push from a series of supportive policies recently announced by the government such as 12 new cities for NEV promotion as well as less deduction on subsidies than originally announced for both 2014 and 2015.
In all likelihood, the Year of the Horse will see more structural changes in the heavy-duty vehicle sector, rather than sales.