China sold 742,600 heavy-duty trucks in 2014, down 4 percent on a yearly basis, according to recent data released by heavy-duty truck manufacturers as reported by cvworld.cn.
Market structure changed compared with 2013. Dongfeng Commercial Vehicle Co., Ltd. (DFCV) remained as the market leader by selling 156,000 heavy-duty trucks in 2014, down 6 percent on a yearly basis. China National Heavy-Duty Truck Group Corp. (CNHTC) was the runner-up, surpassing FAW Jiefang Automobile Co., Ltd. by selling 120,900 units. Sales at FAW Jiefang dropped 11 percent to 116,600 units. Beiqi-Foton Motor Co., Ltd. ranked fourth by selling 108,700 units, down 6 percent. Shaanxi Heavy-Duty Truck Co., Ltd. (Shacman) and Jianghuai Automobile Co., Ltd. (JAC), ranking fifth and sixth respectively, sold 103,600 and 39,800 units, up 2 and 21 percent. They were the only two among the top 10 heavy-duty truck makers that had positive sales growth. SAIC-IVECO-Hongyan Commercial Vehicle Co., Ltd., Hualing Xingma Automobile (Group) Co., Ltd. (CAMC Hualing), and Beiben Heavy-Duty Truck Co., Ltd. sold 25,000, 18,800 and 11,300 units respectively in 2014, down 11, 19 and 38 percent compared with 2013.
Negative growth due to unfavorable economic environment
Customers’ lack of knowledge towards State-IV emissions standards-compliant vehicles and insufficient infrastructure support for fuel and AdBlue injection all hindered sales of State-IV products in 2014.
The slowdown of fixed assets investment growth, in-depth adjustment of economy and demand structure adjustment of heavy-duty truck market all contributed to the sales slump of 2014. Less road and railway infrastructure construction projects, inefficiency of heavy-polluted vehicle elimination, and the repeated delay of State-IV emissions standards implementation all negatively affected the whole industry and led to the overall sales decline for the year.
Public and new energy buses highlight declining bus segment
Sales of large and medium buses fell in 2014 with passenger transport buses most heavily affected. School bus sales fell sharply due to lack of policy support. Public bus sales rose while new energy public bus sales skyrocketed as manufacturers received huge orders from cities and municipalities. For example, Beiqi-Foton received an order from the Beijing Public Transportation Group for 800 units of its AUV electric buses. Ankai signed a 460-unit electric bus purchase contract with the Hefei Public Transportation Group. BYD received a 400-unit electric public bus order from the city of Changsha in Hunan Province. Higer Bus delivered 210 electric tourist buses to Nanjing, while Jiangsu Asiastar Bus won a bid to provide 201 new energy public buses in Yangzhou, Jiangsu Province.
The country released several policies to stimulate sales of new energy vehicles and triggered the new energy bus market, which grew by several folds. According to data from the Ministry of Industry and Information Technology, output of new energy vehicles totaled 56,700 units in the first 11 months of 2014, up 500 percent compared with 2013. Output of electric commercial vehicles and plug-in commercial vehicles grew 188 and 245 percent to 7,363 and 9,949 units respectively in the first 11 months of 2014.
Bus export in general was negatively affected by the volatile international environment. A few big orders, however, came through during the year. For instance, Yutong and Venezuela signed an MOU in July to provide 1,500 buses, auto parts, facilities, repair, and intelligent public bus operation management system to the country. Ankai delivered 1,100 public buses to Algeria, while Zhongtong Bus delivered a record 2,186 school buses to Saudi Arabia.
Further slowdown in 2015 expected
The heavy-duty truck market in 2015 will continue to be affected by the slowdown of the country’s macro economy and step into a “micro growth” period over the next five years with output and sales estimated to reach 1 million units by 2020, according to Yao Wei, industry analyst and chief editor of find800.cn. Elimination and upgrading of yellow-labeled vehicles (heavy-polluted vehicles) in 2015 will boost sales of slag trucks and harbor trailers. The upgrading of logistics transport will provide more opportunities for efficient trailers and load trucks.
The National Development and Reform Commission approved a large number of railway, roadway and infrastructure construction projects at the end of 2014, which will guarantee heavy-duty truck demand in 2015. Negative factors include a decreasing GDP growth to 7 percent and fixed assets investment growth of 17 percent in 2015. The real estate sector in third- and fourth-tier cities may collapse in 2015, according to Yang Zaishun, veteran analyst of the heavy-duty truck industry, which would negatively affect engineering trucks this year.
A decrease of 10 percent in sales is expected for the heavy-duty truck market in 2015, predicted Yang. The market share of trailers may see increase while that of self-dumpers and mixers may decline due to shrinking real estate industry and adjustment of mineral and resources industry. Road trucks and municipal vehicles may see a minor increase. Demand for LNG trucks may jump to another record, according to the analyst.