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Heavy-duty truck sales return to positive growth in Q1 2016

March sales of heavy-duty trucks totaled 72,000 units, up 6 percent year-on-year and 106 percent more than February, indicating a traditional hot season starting from April. Industry total sales were 143,700 units through to March, up 7 percent compared with the same period last year. Booming real estate market, more construction commencement of approved projects and loosening of financial policies of the central government have all contributed to a recovering 2016.

Top 10 HDT makers in sales in March 2016 (in units)

Make

March sales

March 2015 sales

% Change

Jan.-Mar. sales

Jan.-Mar. 2015 sales

% Change

Jan.-Mar. 2016 market share (%)

Dongfeng

15,500

15,102

3

28,900

30,412

-5

20.1

FAW

14,000

11,608

21

28,100

19,335

45

19.5

CNHTC

10,000

10,697

-7

22,300

24,527

-9

15.6

Shaanxi Auto

12,000

11,802

8

21,700

18,970

14

15.1

Beiqi-Foton

9,000

8,197

10

18,300

17,153

7

12.8

JAC

4,216

3,315

27

9,589

8,866

8

6.7

Dayun

1,828

1,610

14

3,986

3,252

23

2.8

Hongyan

1,533

925

66

3,050

2,127

43

2.1

Hualing

1,654

1,762

-6

2,687

4,102

-34

1.9

Beiben

1,000

1,621

-38

2,043

2,450

-17

1.4

Total

72,000

67,699

6

143,700

134,625

-7

100

Source: Truck Manufacturers

The growth in March can be attributed to the comparatively small sales in March 2015 and the rebound of real estate market in certain regions, as well as the fully enforcement of yellow-labeled vehicle elimination, according to Xie Guangyao, chief editor of cvworld.cn.

One of the industry leaders Dongfeng sold 15,500 units in March, up 3 percent on a yearly basis and returned to the No. 1 position in sales. FAW sold 14,000 units with an increase of 21 percent, far more than the industry average. Shaanxi Auto, CNHTC and Beiqi-Foton sold 12,000, 10,000 and 9,000 units, up 9 percent, down 7 percent and up 10 percent respectively. JAC sold 4,216 Gallop heavy-duty trucks in March, a growth of 27 percent. Dayun delivered 1,828 units, with an increase of 14 percent. Sales of Hualing and Beiben, on the other hand, witnessed declines of 6 and 38 percent to 1,654 and 1,000 units.

For the first quarter of 2016, Dongfeng also returned to its leading position thanks to excellent performance in March. Total sales were still down about 5 percent to 28,900 units, taking up 20.1 percent of market share. Sales of FAW increased 45 percent to 28,100 units with a market share of 19.5 percent. CNHTC sold 22,300 units in the first three months, down 9 percent year-on-year with a market share of 15.6 percent.

Shaanxi Auto remained in the No. 4 position by selling 21,700 units, up 14 percent with a market share of 15.1 percent. Sales of Beiqi-Foton grew 7 percent to 18,300 units, with a market share of 12.8 percent. JAC ranked No. 6 by selling 9,589 Gallop heavy-duty trucks in Q1, up 8 percent and took a market share of 6.7 percent. Dayun delivered 3,986 units, up 23 percent with a market share of 2.8 percent.

SAIC-IVECO-Hongyan saw a rebound in the first quarter by delivering 3,050 units, up 43 percent, with a market share of 2.1 percent. Hualing and Beiben sold 2,687 and 2,043 units during this period, down 34 and 17 percent on a yearly basis.

Positive growth foreseeable this year 

According to statistics of the National Bureau of Statistics (NBS), total planned investment in China increased 31.7 percent from last December to February this year, with the solely increase in January and February this year reaching 41.1 percent.

Given the stricter environmental impact assessments (EIA) for newly built real estates and the worse-off local finance, many projects approved last year have not started construction until the beginning of this year, according to Yao Wei, chief editor of find800.cn.

Real estate price in major cities including Beijing, Shanghai, Guangzhou and Shenzhen started to grow from the beginning of the year with property developers starting construction of more projects, which led to the sales growth of heavy-duty trucks as well.

According to NBS statistics, 32 out of the 70 large and medium cities witnessed real estate price increase in February with the largest growth at 57.8 percent. Thirty-seven cities saw price decline with the largest decrease at 3.9 percent. Besides metropolis such as Beijing, Shanghai and Shenzhen, cities such as Nanjing, Suzhou, Hangzhou, Wuhan and Hefei all experienced hot sales of real estates.

The central government reduced the interest rate for five times in 2015 and cut the mortgage rates from 6.15 percent to 4.9 percent, which pushed up the real estate market as well.

Price of second-hand housing of Shanghai increased 14 percent in the first two months of the year, indicating a higher growth than the whole year of 2015.

The central government also reduced the down payments in cities except tier-one cities to 20 percent and further relaxed the terms for secondary suites. Tier-one cities started to enjoy a 1.5 percentage points tax reduction for first suite purchase beginning from February 19 with non-tier-one cities enjoying larger preferential margins. 

The construction start of approved projects, rebound of real estate market and loosening monetary policies will all contribute to a recovering heavy-duty truck market, and whole year sales are very likely to achieve positive growth, as many industry experts predict.

(Rewritten by Jennifer Chen based on authors’ articles on cvworld.cn and find800.cn)

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