China sold 57,000 heavy-duty trucks in June, a jump of 13 percent from June 2015, according to a report on cvworld.cn on July 2 tabulating data reported by major truck manufacturers (see table below).
Despite that it failed to meet the average June sales of 59,000 units during the past six years, it was quite satisfactory compared with the sluggish number of last June.
Net increase of 42,000 units in H1, five consecutive months of double-digit growth
According to analysis from cvworld.cn, June’s 13 percent sales increase has the following significance:
First, it marks the fifth month in a row that year-on-year sales have increased by double-digits, which reflects that the market remains on the track of recovery. Sales fell last year by 26 percent due to the downturn in domestic fixed asset investment and logistics market. Since the beginning of 2016, with growth in road logistics market and the increase of property fixed asset investment, the market is trending towards gradual recovery. Specifically, the growth rates from February to June were 26.83, 10.42, 17.34, 25.37 and 13 percent, respectively.
Second, the ongoing increase in H1 laid a solid foundation for the continued growth in Q3. Propelled by five consecutive months of growth, sales in H1 hit 337,900 units, up 14 percent with a net volume increase of 42,000 units. The major characteristic of the market in H1 was that tractors led the growth and engineering vehicles began to recover. These two trends are expected to continue.
Tractors drive growth, engineering vehicle starts to recover
According to analysis of cvworld.cn, a major force that drove the rapid recovery of the heavy-duty truck market was in the significant rebound in logistics vehicles, especially tractors.
As seen from the January-May data, sales of tractors accumulated to 137,142 units, soaring 28.81 percent from the same period of 2015. The upward trend continued in June. There are several reasons for this.
First, the State-IV emissions standards for diesel vehicles was put into practice, which gave rise to the early consumption and purchase at the end of 2014, then decreased sales of new vehicles during H1 of 2015, and finally fast growth in H1 of 2016.
Second, as the logistics transport age of high-efficiency and intensification is approaching due to the integration of logistics industry, the trend of road logistics transport is developing increasingly rapid towards corporatization. To a large extent, the trend of drivers and companies switching to tractors is rising. Previous users of mid- and low-end tractors of low horsepower are accelerating their pace in upgrading vehicles and they tend to buy new and high-end tractors of high horsepower (especially over 400 hp).
On the other hand, engineering vehicles, especially dump trucks, have started to recover in Q2 of 2016. Thanks to the vigorous addition of fixed asset investment in real estate in the Tier-1 and Tier-2 cities, as well as the operation of part of the national infrastructure investment projects, the domestic dump vehicle market has risen from the bottom during Q1 with a positive accumulated growth in sales.
FAW Jiefang sales nearly double again
From the perspective of market share, FAW Jiefang maintained its No. 1 position in sales for six consecutive months. In June, sales of FAW Jiefang heavy-duty trucks surged 92 to 12,100 on a yearly basis, close to the 105 percent growth achieved in May. Dongfeng and CNHTC (Sinotruk) were second and third with sales of 11,500 and 9,000 units, both edging up 1 percent from the previous yea. Shaanxi Auto and Foton remained in 4th and 5th spots, selling 8,000 and 6,500 units respectively, posting small rises of 5 and 4 percent.
Sales of JAC’s Gallop series fell, however, by 3 percent to 3,100 units. Dayun achieved sales of 1,753 units, up 28 percent. SAIC-IVECO-Hongyan sales surged 74 percent to 1,528 units, while Hualing and Beiben continued to see sales drop by 15 and 12 percent to 1,050 and 900 units, respectively.
In the first half of 2016, sales of FAW Jiefang heavy-duty trucks totaled 71,500 units, ranking first among the top 10 manufacturers with a market share of 21.1 percent and a year-on-year increase of 70 percent. Dongfeng sales reached 65,200 units, ranking second with a market share of 19.3 percent but sales dropped 2 percent. CNHTC sold 55,300 heavy-duty trucks, edging up 2 percent with a market share of 16.4 percent. Sales of Shaanxi Auto increased 13 percent to 47,500 units with a market share of 14.1 percent, while Foton sales stood at 38,600, flat from last year but maintaining its 5th position with a market share of 11.4 percent.
In the third camp, JAC sold 21,600 heavy-duty trucks, up 24 percent with a market share of 6.4 percent. Dayun sales were also up 27 percent to 9,357 units with a market share of 2.8 percent. SAIC-IVECO-Hongyan sales surged 67 percent to 8,011 with a market share of 2.4 percent, while Hualing and Beiben sales fell 26 and 8 percent to 6,467 and 4,841 units, respectively.