After six consecutive months of growth from January to June, electric bus production witnessed a significant drop in July.
According to factory production certificate data from the Ministry of Industry and Information Technology (MIIT), merely 3,394 electric buses were produced in July, a sharp decline of 40 percent from a year earlier and 60 percent from June.
Policy “watching” and lack of capital major reasons behind decline
As seen from the table below, eight out of the top 15 electric bus manufacturers saw production drops in July: Yutong, Zhongtong, Nanjing King Long, Ankai Bus, Jiangsu Joylong, Xiamen Golden Dragon, Dongfeng and Hunan CRRC saw respective production declines of 77, 90, 59, 66, 5, 71, 84 and 100 percent. The overall slump of electric bus leaders really exerted tremendous influence on the entire industry.
On the upside, the net additions were relatively small and most increases were due to low base numbers: Higer, Foton, Zhuhai Yinlong, Yangtse Auto and BYD saw respective increases from 186, 10, 0, 0 and 46 to 219, 204, 15, 2 and 71 units.
One reason behind the sharp decline is that all bus makers maintained a wait-and-see attitude toward when exactly the new NEV subsidy policies for buses will take effect. Mainstream bus makers including Yutong have started to decrease production and control capacity since July so as to control capital risk. According to one bus industry staff, were the adjusted policy to go into effect in July, then fiscal subsidies enjoyed by electric buses of 6-8 meters and 8-10 meters would both reduce ¥100,000 per unit. Therefore, the best means of risk aversion is to lower capacity until the actual policy comes out.
The other reason is the lack of capital. According to cvworld.cn, many bus makers turn to their parent companies for money due to the fact that the national subsidies on new energy vehicles sold in 2015 have not been distributed to bus makers and that H1 2016 witnessed a new production of electric buses totaling only 30,600 units. The capital chain of many bus makers will break sooner or later if H2 production maintains the surge in April-June period.
Yutong and Zhongtong remain top two, Nanjing King Long back to No. 3
Despite the sharp production drop, there were no major changes in industry landscape.
Yutong, Zhongtong, Nanjing King Long, Ankai Bus, Jiangsu Joylong, Foton and Higer remained as the top 7 electric bus makers from January to July. But the internal ranking among top 7 showed slight changes: Nanjing King Long surpassed Ankai to jump to No. 3. It remains to be seen whether this energetic private bus maker could regain its No. 2 position that it held in 2015.
Specifically, Yutong led the way with 6,290 electric buses produced, up 44 percent and accounting for 18.5 percent of industry production. Zhongtong was runner up with 5,462 units, soaring 187 percent and taking up 16.1 percent of the total production. Both remained as the two “superpowers” of the sector.
Nanjing King Long climbed to No. 3 with production of 2,065 units, expanding 50 percent with a production share of 6.1 percent. Ankai Bus was fourth with production of 1,919 units, an explosion of 318 percent with a production share of 5.6 percent. The two players were neck and neck and one might overtake the other at any time.
The same close gap was also between No. 9 Jiangsu Joylong and No. 10 Foton, which had production volumes of 1,768 and 1,694 units, respectively, which represented surges of 67 and 327 percent with production share of 5.2 and 5 percent.
As emerging stars, Yantai Shuchi, Yangzhou Asiastar, CRRC Times and Yangtse Auto have reaped outstanding performances in spite of a late entry into the sector. From January to July, Yantai Shuchi posted production of 1,241 units with a production share of 3.6 percent. Yangzhou Asiastar posted an explosion of 761 percent with a production of 1,197 units and a production share of 3.5 percent. Hunan CRRC Times produced 743 units, rising 19 times with a production share of 2.2 percent. Yangtse achieved a production of 693 units, up 76 times with a share of 2.0 percent.
Bus makers that saw drop in cumulative production were Xiamen Golden Dragon and Dongfeng Auto. The former achieved a total production of 1,065 units, down 7 percent while Dongfeng produced 862 units, a sharp decrease of 43 percent. It is interesting to note that Xiamen Golden Dragon, a leading bus maker, remains only at No. 15 when it comes to electric bus production.
(Rewritten by Xu Jun based on author’s article on cvworld.cn)