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Overcapacity haunting China’s heavy-duty truck market

by Li Xuelei

China’s heavy-duty truck makers are expanding their production capacities despite facing quick drops in sales, and the whole industry is confronting severer overcapacity in 2013.

According to incomplete statistics of cvworld.cn, the under construction and newly built production capacities of China’s medium- and heavy-duty truck industry totaled 1,545,000 units in 2012 with 420,000 units of them were newly built. These capacities will be gradually released in 2013 and the following few years and will greatly intensify the competition of the industry.

As shown in the following tables, China National Heavy-Duty Truck Corp. (CNHTC) owns the largest newly built capacity of 380,000 units. Dayun Motor ranked the second by launching 310,000 units capacity in Yuncheng of Shanxi, Chengdu of Sichuan and Shiyan of Hubei. Such huge production capacity is in sharp contrast with the mysterious sales of the enterprise.

Worth noting is that although China’s heavy-duty truck market decreased for 28 percent year-on-year in 2012, new comers are keeping on expanding their production volumes. For example, XCMG Group is building a 60,000 units heavy-duty truck production base in Xuzhou, and enterprises of the Aviation Industry Corp. of China (AVIC) also launched a 60,000 units heavy-duty truck production base in Xingtai of Hebei, and plans to rejuvenate the disappeared Changzheng brand heavy-duty trucks. 

 

New production bases and projects of medium and heavy-duty truck makers

 

Make

Location

Capacity (in units)

Introduction

Dongfeng Motor Group

Hangzhou, Zhejiang

50,000

Started by Dongfeng-Nissan Diesel, the project is estimated to be put into operation by the end of 2013 and reach a 30,000 units capacity in 2014 and 50,000 in 2015

Shiyan, Hubei

80,000

Investment: ¥2.3 billion ($369 million)

CNHTC

Sanming Haixi base, Fujian

200,000

Put into operation on January 5, 2012; Investment: ¥2 billion

Urumchi, Xinjiang

80,000

Launch time: July 28, 2012; Investment: ¥1.2 billion; Estimated annual production value: ¥15 billion

Chengdu, Sichuan

100,000

Investment: ¥3 billion; Estimated sales revenue: ¥8 billion; Put into operation in 2012

 

 

Make

Location

Capacity (in units)

Introduction

FAW Qingdao

Chengdu, Sichuan

60,000

Added investment: ¥1 billion; Light truck production capacity: 40,000 units

Shaanxi Heavy-Duty Truck

Urumchi, Xinjiang

50,000

Investment: ¥1.36 billion; Phase II to be finished in 2014; Estimated production value: ¥15 billion

Huainan, Anhui

50,000

Put into operation on October 28, 2012; Investment: ¥1.59 billion; a new energy special-purpose vehicle base

Yan’an, Shaanxi

20,000

Investment: ¥230 million; Construction to be finished in Q1 2013

Datong, Shanxi

50,000

Investment: ¥1.3 billion; Trial production started from July 2012

 

Make

Location

Capacity (in units)

Introduction

Hualing Xingma

Hengyang, Hunan

10,000

First batch of heavy-duty trucks rolled off the assembly line on April 28, 2012; Investment: ¥500 million

Ma’anshan, Anhui

100,000

Put into operation on September 1, 2012

Sichuan Hyundai

Ziyang, Sichuan

160,000

Launched on August 28, 2012; Phase I investment, ¥5.4 billion, to produce EV, energy-saving and CNG vehicles; Phase II to reach capacity of 400,000 units; Phase III to reach a capacity of 700,000 units

 

Make

Location

Capacity (in units)

Introduction

Dayun Motor

Yuncheng, Shanxi

110,000

Phase I finished with an annual production value of ¥15 billion; Phase II investment, ¥2.31 billion with an annual production value of over ¥18 billion

Chengdu, Sichuan

100,000

To be put into operation before October 2013

Shiyan, Hubei

100,000

Investment: ¥2 billion

Sanhuan Special-Purpose Vehicle

Shiyan, Hubei

100,000

Investment: ¥2 billion; Phase I was put into operation on January 12, 2013 with a production capacity of 30,000 medium- and heavy-duty trucks

 

Make

Location

Capacity (in units)

Introduction

XCMG

Xuzhou, Jiangsu

60,000

XCMG heavy-duty truck production base was launched on January 12, 2013; Estimated to be put into operation in Q1 2014

AVIC

Xingtai, Hebei

50,000

Investment: ¥5 billion; Finishing date: 2015

Youngman-MAN

Shizuishan, Ningxia

15,000

Assembly line finished on September 1, 2012

(Rewritten by Jennifer Chen based on author’s article on cvworld.cn)

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