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Large and medium bus market thrives in the first four months

by Wang Jian

In 2010, the bullish market for large and medium buses so far has leaped beyond expectations of manufacturers and analysts, growing faster than predicted. Spokespeople from leading busmakers such as Yutong Bus Corp. (Yutong), Ankai Auto (Ankai), Xiamen King Long United Auto (King Long) and Higer Bus Co., Ltd. (Higer), all stated that sales in the first quarter have refreshed their company records.

According to statistics from China Association of Automobile Manufacturers (CAAM), 93 busmakers in China sold a total of 19,000 units of large buses from January to April this year, up 105 percent compared to the same period in 2009. In April, China produced 4,921 units of large buses and sold 5,106 units, up 84.65 and 90.24 percent year-on-year respectively, and up 26.67 and 44.44 percent over March. The unexpected market boom has jumped beyond mere recovery growth, and is presenting a beautiful forecast for the bus industry in 2010.

Flourishing road transportation market

Higer sold 716 units of large road buses in April, up 153.9 percent over last year, while Yutong beckoned a 117 percent rise for its non-public-transportation products in the first quarter. The sales growth can also be observed with other busmakers. While the high growth can be attributable to sluggish sales from last year, it also represents a full activation of market demand.

Market analysts believe that passenger transport providers started to purchase more vehicles because an increase in social activities has driven up the demand for road transportation.  Hu Jiandu of Higer’s marketing department pointed out that based on sales figures, the 12-meter large road buses have regained popularity. Considering all around costs, comfort and safety issues, large buses should come as top choices to passenger transportation operators. Hu is confident that large buses will remain the mainstream of the market with the potential for even greater demand in the long term. Meanwhile, Xu Yingchun, marketing manager at Ankai, also gives credit for the booming market to road transportation activity. Xu believes that under the climax of road-rail competition and the influence of the global recession, road transportation slowed last year with operators hesitating for further investment. However, as the economy recovers, the launching of high-speed rails has provided business opportunities for bus operators, as there is demand for transportation from rail stations to more remote destinations. The transportation development in rural areas also stimulated the sales of buses under eight meters.   

Policies a key factor in the public transportation market

Aside from the road transportation market, the boom in public transportation has been stimulated by government policies. The government implemented a direct fuel subsidy policy for public transportation enterprises, effective Jan 1, 2010. Influenced by the urbanization and expansion of cities with satellite towns, public transportation operators have quickened the pace of purchasing new vehicles or replacing old ones. “There has been a trend for public buses to go large and high-end. Alternative and clean energy vehicles are gaining popularity. Many companies have made low-floor designs a must when picking up bus models,” said Xu.

In the first quarter, sales of tourist coaches were 4,744 units, up 110 percent over last year. Xu recognized the increase as a result of the government policies to revitalize tourism and develop an international tourist island in Hainan Province. The Hainan project, for example, has led to an order of 400 units of tourist coaches.

The export market was also remarkable in the first four months of the year. CAAM reports that 15,100 units of buses were exported in the first quarter of 2010, up 88.76 percent from last year. King Long, close to its highest record set in 2008, exported 1,221 units of buses in the first three months, up 205 percent year-on-year. Yutong sold 1,011 units of vehicles to the overseas market from January through April, up 1,163.8 percent over the same period last year. Although the export market has gone back to the escalading funnel, it could take longer to reach pre-recession sales levels of 2008.

Bus market in the rest of the year

China is holding the World Expo 2010 in Shanghai and Asian Games 2010 in Guangzhou this year, which will surely boost the tourism and passenger transportation markets. According to industry analysts, China is to implement the State IV emission standards nationwide at the end of the year, which will bring up vehicle prices due to higher production costs, some clients therefore will seize the last opportunities to purchase State III vehicles with lower prices before the new standards take effect.

Xu Yingchun remained cautious by predicting a yearly growth of 8-10 percent. But considering a peak in vehicle replacements during April and May, with the actual consignments taking place potentially through the third quarter, Hu Jiandu is confident that the large and medium bus market will keep booming.

Rewritten by Toni Li based on author’s article on cv.cr.cn

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