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Roundup of China’s commercial vehicle market in the first half

China produced and sold 311,570 and 350,631 commercial vehicles in June, up 14.36 and 19.53 percent year-on-year. Output and sales of commercial vehicles in the first six months were 2,087,181 and 2,117,142 units respectively, an increase of 8.15 and 6.68 percent on a yearly basis. The truck sector has rebounded gradually thanks to the State IV emission standards and the popularity of LNG trucks. However, the bus sector, though maintained growth in the first half, may not see sustained increase in the second half due to unclear government policies.

Recovering truck market

China produced and sold 259,742 and 297,739 trucks (including chassis and semi-trailers) in June, down 16.74 and 5.31 percent month-on-month, and up 13.61 and 20.24 percent year-on-year. Output and sales of trucks totaled 1,819,855 and 1,849,660 units in the first half of 2013, up 7.44 and 5.86 percent on a yearly basis.

China’s heavy-duty truck sector has experienced the gloomiest period in 2012 due to the economic downturn. The sector rebounded in the first half of this year, selling 402,679 units through June, up 8.36 percent year-on-year, according to the latest statistics of China Association of Automobile Manufacturers (CAAM).

 

Truck sales in H1 2013 (in units)

 

June sales

% Change

January-June sales

% Change

Heavy-duty trucks*

75,085

50.82

402,679

8.36

Medium trucks**

26,300

24.37

159,338

13.91

Light trucks**

153,766

12.12

1,004,004

5.04

Micro trucks**

42,588

7.67

283,639

1.33

* Including chassis and semi-trailers 

** Including chassis

 

Sales of top 5 truck manufacturers in H1 2013 (in units)

 

Heavy-duty trucks

Medium trucks

Light trucks

Micro trucks

Rank

Make

Sales

Make

Sales

Make

Sales

Make

Sales

1

Dongfeng

87,354

Dongfeng

47,339

Beiqi-Foton

203,943

SAIC-GM-Wuling

71,969

2

FAW

64,705

FAW

25,017

JAC

123,365

Beiqi-Foton

50,692

3

CNHTC

63,011

CNHTC

18,780

Dongfeng

95,483

Dongfeng

43,152

4

Beiqi-Foton

58,281

Lifan

11,038

Jinbei

81,433

Chang’an

38,558

5

Shaanxi Auto

52,938

Qingling

9,119

JMC

72,748

Kaima

9,123

 

The scheduled implementation of the State IV emission standards for diesel trucks has helped increase sales, reported Shangyong Qiche Xinwen or Commercial Vehicle News. According to an executive of Shaanxi Auto, a State IV vehicle is ¥15,000 ($2,407) more expensive than a State III vehicle. Although the new standards were postponed at the last minute, consumers rushed to purchase State III-compliant trucks ahead of the new standards, boosting sales in May and June. 

Demand for LNG trucks has kept an annual average growth rate of 20 percent in the past two years, much higher than that of diesel trucks.

Shaanxi Auto had orders of more than 7,000 units of LNG trucks in the first half and was able to deliver 6,000 units. The company has increased sales target of LNG trucks for 2013 to 12,000 units. “LNG trucks will become more popular given the rising gasoline price and the policy support of the government,” said a company executive.

“LNG trucks have become the highlights of CAMC truck sales,” said Chen Huisong, marketing executive of Hualing Xingma Automobile (Group) Co., Ltd. (CAMC). The company sold over 500 LNG trucks in the first five months, 200 units more than the total in 2012.

High gasoline price and rising driver salary have led logistics companies to lower-cost heavy-duty trucks. LNG trucks are more expensive but truckers would save on operating cost.

Analysts believe that manufacturers will produce more LNG trucks given rising market demand and the implementation of the new edition of the Policy for Natural Gas Usage drafted by the National Development and Reform Commission.

Shaanxi Auto, Baotou Beiben, FAW Jiefang, CAMC and Beiqi-Foton have all increased output of various models of LNG trucks.

 

Increasingly grim bus sector

Sales of buses (including chassis) jumped 18.27 percent during the January to June period to 52,892 units.

China produced and sold 51,828 and 52,892 buses (including large, medium, light buses and bus chassis) in June, up 18.27 and 15.72 percent year-on-year. Output and sales of buses in the first six months were 267,326 and 267,482 units, up 13.24 and 12.7 percent on a yearly basis.

 

Bus sales in H1 2013 (in units)

 

June sales

% Change

January-June sales

% Change

Large bus*

7,175

6.61

35,693

9.89

Medium bus*

7,963

32.12

30,628

1.6

Light bus*

30,207

18.84

160,826

19.05

* Excluding chassis

 

Sales of top 5 bus manufacturers in H1 2013 (in units)

 

Large bus

Medium bus

Light bus

Rank

Make

Sales

Make

Sales

Make

Sales

1

Yutong Bus

11,809

Yutong Bus

11,125

Jinbei

51,346

2

Higer

4,772

Higer

3,710

JMC

31,588

3

King Long

3,990

King Long

3,070

Nanjing Auto

20,900

4

Golden Dragon

3,145

FAW-Toyota

2,600

Beiqi-Foton

14,675

5

Zhongtong

2,472

Ankai Bus

2,129

King Long

7,706

 

According to the latest statistics of CAAM, the bus sector still maintained a growth rate of 12.7 percent in the first half, however.

The three segments with strongest demand were public buses, school buses and export. According to Meng Zhenhai, vice president of Chang’an Bus, sales of public buses of the company grew by 31 percent in the first six months.

China sold 11,908 school buses in the first five months, up 18.8 percent on a yearly basis. The country exported 61,800 buses through May, an increase of 48.1 percent, far more than the 11.1 percent growth of the automobile sector as a whole.

New energy vehicle segment also maintained a high increase of 53.22 percent to 3,138 units in the first five months.

However, given the cooling down in demand for school buses and the unclear new energy bus policy, the bus sector may not sustain its growth in the second half, according to industry analysts.

“Demand for school buses has started to cool down,” said an executive of Zhongtong Bus Sales Co. “The strict standards for school buses have lifted product price, which affects sales,” said the executive. He believes that because of other emerging social issues in the past few months, society and the government have paid less attention to the issue of school buses. “The increase of school bus sales will further slowdown if no preferential policies are announced in the second half,” the executive said. 

The government also announced to cease the subsidy to hybrid buses in non-pilot cities at the end of May. “We have not received any orders of new energy vehicles,” said a sales representative of Yutong Bus. Li Dusheng, branding management at Zhongtong Bus, also confirmed that the company has not received any new orders after the phasing out of the subsidy.

Demand for highway and tourist buses continued to slow down in the first half and may drag down the whole market in the second half, said She Zhenqing, deputy secretary-general of China Highway Transportation Society.

According to Zhang Hongxi, vice chairman of Shangqiu Traffic Transportation Group in Henan Province, the downturn of highway bus transportation may still be observed in a short period of time.

The consolidation of the tourism industry and the emergence of car leasing companies and free highway tolls during holidays have reduced market shares of tourist buses.

The public bus sector may experience a slowdown due to shrinking government investment. “The public bus market may maintain an increase of 25 percent,” said a marketing executive of Chang’an Bus.

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